Over the last years , I've seen many predictions of how much growth there will be in a particular market , some times they get it right , but when the markets are moving strongly they never do . They always underestimate the strength of the movement .
Why ? Because it's not rational . It's not based on statistical analysis or economic theory or even affordability ......
I t's based on human emotion and that is always irrational , and that lack decision making is and always be an integral part of us as a race . It's not going to change .
So when I see a ( presumably statistically based ) based prediction on how much a particular market will move I look at the circumstances around it .
The prediction of interest for me was this one
Macquarie Capital?s Rod Cornish suggests that interest rates look like staying low for longer than he'd originally thought - which may impact prices.
Without a rate rise, Sydney would reach the tipping point ? where the strongly growing market would change ? after another 15% price rise, he told the Australian Financial Review.
But he forecasts if rates were to rise 1%, perhaps in 2015, then that market change point would be hit after a 7% price rise.
"If rates were to rise 0.5%, the tipping point would be reached after a 10% house price rise," he said.
I haven't seen to many people prepared to put a figure on how much Sydney might move in the near future , but I'm assuming this one will have had a reasonable amount of analysis done to predict how much the market might move based on affordability , wage growth , bank lending practices etc . So for me it's probably a logical prediction.
Now , I don't know whether Sydney will move strongly , the next six months will tell , but I won't be surprised if sydney does move strongly at the moment , ther is a good chance that it will be by more than 15 % .
That would be irrational , wouldn't it ...
Cliff
Why ? Because it's not rational . It's not based on statistical analysis or economic theory or even affordability ......
I t's based on human emotion and that is always irrational , and that lack decision making is and always be an integral part of us as a race . It's not going to change .
So when I see a ( presumably statistically based ) based prediction on how much a particular market will move I look at the circumstances around it .
The prediction of interest for me was this one
Macquarie Capital?s Rod Cornish suggests that interest rates look like staying low for longer than he'd originally thought - which may impact prices.
Without a rate rise, Sydney would reach the tipping point ? where the strongly growing market would change ? after another 15% price rise, he told the Australian Financial Review.
But he forecasts if rates were to rise 1%, perhaps in 2015, then that market change point would be hit after a 7% price rise.
"If rates were to rise 0.5%, the tipping point would be reached after a 10% house price rise," he said.
I haven't seen to many people prepared to put a figure on how much Sydney might move in the near future , but I'm assuming this one will have had a reasonable amount of analysis done to predict how much the market might move based on affordability , wage growth , bank lending practices etc . So for me it's probably a logical prediction.
Now , I don't know whether Sydney will move strongly , the next six months will tell , but I won't be surprised if sydney does move strongly at the moment , ther is a good chance that it will be by more than 15 % .
That would be irrational , wouldn't it ...
Cliff