FOOL OR FORECASTER REPORT

FOOL OR FORECASTER REPORT

copy Property Minds 2021

DISCLAIMEREverything in this report is general in nature and should never be considered to be personal financial advice If youre looking to get advice please seek the help of a licensed financial advisor or buyers agent who will tailor and document their advice to your personal circumstances with a statement of advice We have relied on third party resources when compiling this report which we assume to be correct and accurate to the best of our knowledge

wwwtheelephantintheroomcomau2021 FOOL OR FORECASTER REPORT

1

Regular listeners will know I have a potty mouth so Irsquom hoping yoursquoll forgive the heading But really what other word can we use when such a high percentage of forecasts are out and out wrong

In our 2020 Fool or Forecaster Report we reported that only 2 out of 16 of the forecasters we tracked predicted the property market turning point in 2019 That means 14 or 875 got it wrong and many of them got it wrong by a lot

In this report as we reflect back on the predictions made throughout an entirely unpredictable year I cannot help but wonder why anybody is brave enough to say that they know whatrsquos going to happen to the property market Yet theyrsquore still at it - as we write this report we can see that next yearrsquos report is already shaping up to be a doozy

Veronica Morgan

WHY ARE FORECASTS ST




2

Stuart Wemyss who got one of the two gold stars we handed out in last yearrsquos Fool or Forecaster Report drew my attention through one of his Investopoly podcast episodes to the largest longitudinal study on forecasts which was a series of tournaments conducted between 1984 and 2003 by American Political Scientist Philip E Tetlock

ldquoThe tournaments solicited roughly 28000 predictions about the future and found the forecasters were often only slightly more accurate than chance and usually worse than basic extrapolation algorithms especially on longerndashrange forecasts three to five years out Forecasters with the biggest news media profiles were also especially bad This work suggests that there is an inverse relationship between fame and accuracyrdquo (Wikipedia)

Their research has shown that the accuracy of forecasts is improved when the timeframe is shorter (less

Have forecasters always been this bad

than 12 months versus longer) when there is accountability (such as if they read this report and cared) when itrsquos acknowledged that there are biases and there are conscious efforts to avoid them

Tetlock went on to co-found the Good Research Project with his wife and research partner and the premise of this seems to be that ldquoSuperforecastersrdquo can be created and predictions can be a hell of a lot more reliable

ldquoThe authors stress that good forecasting does not require powerful computers or arcane methods It involves gathering evidence from a variety of sources thinking probabilistically working in teams keeping score and being willing to admit error and change courserdquo (Wikipedia)

Like der really We wonder how many property forecasters are subjecting themselves to this rigour Irsquod be surprised if only two out of sixteen do Something else must be up




3

The elephant is in charge

ldquoWhatrsquos surprising is this experts suffer even more from overconfidence than laypeople do If asked to forecast oil prices in five yearsrsquo time an economics professor will be as wide off the mark as a zookeeper will However the professor will offer his forecast with certituderdquo

(Dobelli p49)




4Of course when an educated authority on a subject offers an opinion those listening will be swayed or bolstered depending on their starting position If we hold our own strong opinion (or even if wersquore leaning in one direction more than the other) wersquore open to be influenced by confirmation bias whereby we seek out ldquoevidencerdquo that supports our thesis

This is why both bull and bear commentators have ardent followings regardless of whether the market is performing the way theyrsquove predicted

ldquoWhat makes overconfidence so prevalent and its effect so confounding is that it is not driven by incentives it is raw and innate And itrsquos not counterbalanced by the opposite effect ldquounderconfidencerdquo which doesnrsquot exist No surprise to some readers overconfidence is more pronounced in men - women tend not to overestimate their knowledge and abilities as much Even more troubling optimists are not the only victims of overconfidence Even self-proclaimed pessimists overestimate themselves - just less extremelyrdquo

(Dobelli p50)

When market conditions are testing such as prices steeply falling or rising or when ldquounprecedentedrdquo macro-environmental forces like a pandemic create mass uncertainty the media will be full of reports about the state of the market and the experts will line up to share their opinions Unfortunately when human beings are under stress we are less likely to invest the time and care required to think clearly and make our own minds up

ldquoUsually the grander the forecast ndash calls for ldquonew eras of permanent prosperityrdquo or for ldquogreat crashes aheadrdquo ndash the greater the need for scepticism as such calls are invariably wrong either they get the timing wrong or its dead wrongrdquo

(Oliver)

ldquoI didnrsquot get it wrong I just got the timing wrongrdquo

(Paraphrased from a serial offender property bear)




5

Ross Gittins Economics Editor of The Sydney Morning Herald posits that economists have been forgetting they are social scientists in the pursuit of mathematical equations that predict human behaviour

ldquoIf you accuse an economist of thinking they know what the future holds theyrsquoll vehemently deny it No one could be so silly But the truth is they go on analysing economic behaviour and making predictions in ways that implicitly assume it is possible to know the futurerdquo

(Gittins)

We humans can be annoyingly predictable and unpredictable or perhaps predictably unpredictable We donrsquot follow neat scientific laws which can then be plugged into formulas Wersquore influenced by our own behavioural biases herd

mentality loss avoidance scarcity bias confirmation bias story bias authority bias you name it theyrsquore all prevalent in our behaviour around property If you need a refresher (or havenrsquot yet listened to it) go back and listen to our very first episode where we interviewed behavioural scientist Simon Russell about the ways in which we are influenced without knowing it

wwwtheelephantintheroomcomaupodcasts1

When you consider that perhaps the wrong methodology may be employed by economists to predict the property market it should come as no surprise that they keep getting it wrong Residential real estate is after all about people not bricks and mortar and itrsquos naive to assume that people behave rationally especially with something as emotive as their home




6

An economistrsquos perspectiveIn our interview with AMPrsquos Chief Economist Shane Oliver in Episode 117 he muses about the challenges forecasters have in getting it right (if you want to listen and yoursquore short on time fast forward to around the 42 minute mark for his insights)

ldquoForecasters suffer from the same biases as everybody else And one of the worst biases is to give too much weight to the current situation So if things are going up and theyrsquove been going up for a while you just assume theyrsquoll keep going up and if things are going down you just assume theyrsquoll keep going down or stay downrdquo

Shane Oliver Ep 117

Reflecting on his own call on the market in 2019 Oliver reveals how he applied one of the Superforecaster techniques for improving predictions

ldquoAnother one is to anchor and adjust get some new information that actually suggests things that radically changing and I reckon I was subject to a bit of this around May last year [2019] Going into May last year I thought there was quite a bit more downside in the Australian property market We had the May election we had the rate cuts and so on and I adjusted my view and said well we might be close to the bottom but I didnt quickly turn around enough You know I sort of said yeah this this is a completely new ballgame and were now going up I sort of just hedged it a little bit So that was a classic case of anchor and adjust

ldquoI just adjusted my forecast a little bit but I should have gone the full way and said you know weve probably seen the low wersquore taking off And I did that a month or so later So I got in there in the end but anchor and adjust is where we just incrementally change the forecast when therersquos new information which suggests a need for more radical changerdquo





7

The problem with forecasting is that there needs to be some element of predictability in the factors upon which the forecasts are based The Sydney Morning Herald amp The Age Scope survey consists of a panel of 18 economists and on review of their 2019 predictions nobody got the ldquoForecaster of the Yearrdquo gong because the unpredictability of that year led to drum roll nobody getting enough of their predictions right

ldquoAmong the panel there were two other economists who deserve an honourable mention Industry Super chief economist Stephen Anthony who has won the title of forecaster of the year for several consecutive years and BIS Oxford Economics chief economist Sarah Hunter were spot on for some of their estimates

ldquoI got it wrong Mr Anthony said about several of his predictions [After making the predictions] you can do all sorts of justifications its very difficult

ldquoMs Hunter said it was definitely

trickier to forecast in 2020 as there were many factors that could go either way in terms of easing or worseningrdquo (Duke et al )

When listening to property market predictions (as well those made about the share market and elections for that matter) we need to recognise that the experts are using aggregated data in order to make big decisions often of a corporate nature Some of the most prolific economists work for banks and they need to have a view on where things are heading so they can steer the business and fulfill their duty to shareholders There is little value in an individual buyer using these predictions to base their decisions on especially given the low level of accuracy Nevertheless many do They pile into the market when the predictions are positive and sit on their hands when theyrsquore negative Instead what should happen is that each and every buyer conducts their own research with a particular focus on local market dynamics




8

But herersquos the thing biased or otherwise at least economists are educated use accepted frameworks and are trained to do the sort of research and modelling required to make their predictions Theyrsquore the most respectable and credible of the forecasters but there are plenty of others out there making confident claims What do we make of all those other lsquoexpertsrsquo who fill the airwaves with their predictions

If they have skin in the game we need to have an active bullst antenna particularly if they are

Itrsquos not only economists who make predictions

forecasting a ldquogrowth areardquo New infrastructure subdivisions and building commencements do not automatically equate to capital growth for individuals Often itrsquos the complete opposite that occurs

We often draw comparisons between property market and share market forecasts as the behaviour and outcomes can be very similar Therersquos a wealth of opinion vested interest hype hubris selective memory and storytelling to fill our ears yet very little that we can actually bank on




9

ldquoOne of the ironies of the stock market is the emphasis on activity Brokers using terms such as ldquomarketabilityrdquo and ldquoliquidityrdquo sing the praises of companies with high share turnover (those who cannot fill your pocket will confidently fill your ear) But investors should understand that what is good for the croupier is not good for the customer A hyperactive stock market is the pickpocket of enterpriserdquo

(Buffett)

Itrsquos not only Australian forecasters who get it wrong and itrsquos not only the Australian property market that is defying pandemic-logic I found an Canadian article with the same refrain

ldquoForecasting is more of an art than science George Box a famed statistician who devised innovative forecasting tools has warned that all (statistical) models are wrong yet some are useful But distinguishing wrong forecasts from the useful ones is even more challenging than forecastingrdquo (ldquoWhy doomsday housing forecasts have proven wrong mdash for nowrdquo)

We know that most forecasters get it wrong We know that their predictions arenrsquot designed for individuals to base their decisions on We know that some forecasters actively work to reduce the impact of known biases on their work We know that others are peddling a thesis and will only get it right sometimes because of the laws of probability The final word Go ahead and listen to them if yoursquore interested but if you canrsquot ignore them it may be best to switch off




10

Buffett Warren The Essays of Warren Buffet Lessons for Investors and Managers 1988

Dobelli Rolf The Art of Thinking Clearly Hodder amp Staunton 2014

Duke Jennifer et al ldquoI got it wrong Unpredictable year stings economistsrdquo Edited by Sydney Morning Herald Sydney Morning Herald 30 January 2020 httpswwwsmhcomaupoliticsfederali-got-it-wrong-economists-stung-

by-unpredictable-year-20200130-p53w6qhtml

Gittins Ross ldquoWhy Economists Get So Many of Their Predictions Wrongrdquo Ross Gittins httpwwwrossgittinscom202101why-economists-get-so-many-

of-theirhtml

Oliver Shane ldquoThe 9 bad habits of highly ineffective investorsrdquo Business Insider httpswwwbusinessinsidercomaushane-oliver-the-9-bad-habits-of- highly-ineffective-investors-2016-12

ldquoWhy doomsday housing forecasts have proven wrong mdash for nowrdquo Financial Post 16 December 2020 httpsfinancialpostcomreal-estatewhy-doomsday-

housing-forecasts-have-proven-wrong-for-now

Wikipedia ldquoPhilip E Tetlockrdquo httpsenwikipediaorgwikiPhilip_E_Tetlock

Bibliography




11

As we entered 2020 it was clear both Sydney and Melbourne property prices were running strongly both having experienced considerable gains in the second half of 2019 And then COVID-19 hit

Interestingly we found that almost all predictions were a similar version of each other Almost everyone was overly confident at the start of 2020 excessively negative in the eye of the COVID-19 storm and finished the year super positive about 2021

This seesaw is common whereby the media and forecasters flip on a dime making the predictions nothing but clickbait for advertisement in traditional media

As always we like to highlight those that did a great job staying balanced considered and accurate in predicting how the complex ever-changing dynamics of the Australian Property Market will respond to new information

As we now know in most markets the lockdown price falls were not significant There were undoubtedly big problems in tourism centric towns and inner city apartments took the brunt of the downturn with significant increases in vacancy rates and listing numbers Overall prices havenrsquot recovered in these market sectors

2020Forecasts

ldquoAMP Capital chief economist Shane Oliver who believes the RBA will take the official cash rate to 025 per cent by the middle of the year is tipping a 12 per cent increase in Sydney and a 13 per cent in Melbourne through 2020rdquo

SMH February 2020

Chris Bates




12

In particular 2020 was the story of the house market (as opposed to units) across most of the country with strong price rises across the second half of the year The lifestyle regional towns were the true winners of 2020 with immense growth which is continuing into 2021 This has been happening in parallel to the city house markets taking off

This report is all about looking at what the forecasters and fools said I prefer to break up the people who make predictions about the property market into a few buckets

First you have the institutions mainly the banks which are severely conflicted yet have access to arguably some of the best real-time data of everyday financial behaviour Youd think the data from millions of Australian bank accounts would be incredibly valuable and lead to insightful forecasts

The second bucket contains the experts economists rating agencies property commentators and all those who make a living dishing out forecasts Youd think if you are paid for your opinion it would be because you are usually right and can be relied upon

The final bucket is where the doomsayer lives a bunch of serial offenders that make a living pedaling negative property stories to those who are attracted to believing the world will collapse at some point when they can finally benefit from being right all along




13

The banks had a rather challenging year whereby many were predicting solid growth of around 7-10 at the start of 2020 and within months at the height of immense fear amid COVID-19 they all suggested a significant collapse in prices Nevertheless not all were exceedingly positive at the outset of the year but they werenrsquot referring to a pandemic being the cause

ldquoIndustry Superannuation Australia economist Stephen Anthony believes price increases through the full year will be moderate He is tipping a 4 per cent lift in Sydney and half that in Melbourne

ldquoJust one member of the panel Monash Universitys Jakob Madsen believes prices in both cities will fall this year He is tipping a 5 per cent drop in Sydney and Melbourne

ldquoWestpac chief economist Bill Evans who believes the RBA will slice interest rates once by June also believes property markets will slowrdquo

SMH 1 February 2020

The banks ampother institutions

It was a rather sobering read in April and May when both NAB and CBA suggested up to 30 falls in their worst-case scenarios while the base case across all of the Big Four was a 10-15 drop across the country At the same time its not fair to be too hard on the banks as the world was full of unknowns with utter fear gripping Australia

ldquoHouse prices could tumble by a cumulative 30 per cent over this year and next under the most pessimistic scenario unveiled by National Australia Bank as it braces for higher defaults caused by the coronavirus crisisrdquo

SMH 27 April 2020

ldquoUnder revised forecasts the Commonwealth Bank which holds the largest slice of Australian mortgages at $446 billion worth now sees prices plunging 10 within six months as the COVID-19 outbreak kneecaps economic activityrdquo

Business Insider 17 April 2020




14

ldquoAll in all we expect dwelling prices could fall by as much as 5-10 per cent this calendar year a notable number but below other doomsday scenarios to make recent headlines

ldquoIn better news dwelling prices could rise very modestly over 2021 by 2 per cent amid a recovery in demand and confidence as the economy turns around and low interest rates underpin the market The turnaround in 2021 relies on a second wave of infections not materialising and the global economy also effectively containing the virus over this year As previous

FORECASTER JAN - FEB 2020 COVID APR - MAY 2020

CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip

In September once the eye of the storm had passed the banks quickly changed their doomsday predictions to a robust recovery in late 2020 and by early 2021 were forecasting 10-20 over the next couple of years in our capital cities

RBA research has highlighted interest rate cuts can have a powerful impact on housing prices and the declines this cycle are likely to ultimately provide supportldquo

Besa Deda Westpaccomau 30 April 2020

And it kept getting worse as economists revised their forecasts of impending doom

ldquoHome prices will tumble 32 per cent over a prolonged downturn period the Commonwealth Bank has warnedrdquo

Yahoo Finance 13 May 2020




15

What a turnaround you might be thinking from 30 falls to up to 30 rises I truly hope you didnt sell in May based on their advice and made quick fear-based decisions on their guidance

ldquoWestpac chief economist Bill Evans has revised his residential property price projections amid signs of stronger than expected economic recovery

Mr Evans has initially forecast a 10 per cent decline in national home values over the period between April 2020 and June 2021

ldquoHowever Mr Evans is now anticipating a peak-to-trough decline of 5 per cent with several capital cities including Sydney proving ldquomore resilientrdquo to the economic fallout from the COVID-19 crisisrdquo

Mortgage Business September 2020




16

The next group of experts would include property commentators other economists and broader economic commentators like Chris Joye and Stuart Weymss who wersquoll refer to later in this report Many called the downturn but few were positive about the property market in the light of the pandemic

Many property experts like Louis Christopher did a lot of modelling and got a lot of headlines Thirty percent downturns seemed to be a common refrain

ldquoWhen I say major were talking up to a 30 per cent decline over a 12-month period with the bulk of those declines occurring in Sydney and Melbourne he said

The experts

ldquoWere not saying this is definitely going to happen its more a warning that if we were to see the restrictions with us for the full six months at their current levels this is what would happen

ABC The Business 17 April 2020

And then the models were reworked as the market defied the best guesses of most experts

ldquoProperty data house SQM Research managing director Louis Christopher is now expecting prices to jump by 7 to 11 per cent in Sydney and by 2 to 6 per cent in Melbourne in a base case scenario National prices are expected to increase between 5 and 9 per centrdquo

SMH 7 December 2020




17

The final group - well they had a field day with COVID and made big calls such as 30-45 falls which did not sound so crazy when even the banks joined in The serial offenders are our friend and regular guest Martin North who is often quoted with doomsday predictions He must have been left scratching his head as the government pulled plenty of rabbits out of their hat to protect property prices at the height of the pandemic Then there is his regular guest and media favourite Harry Dent who may be the worldrsquos most profitable

The doomsdayers

doomsayer Dent has been predicting 30-50 falls for as many years as Irsquove known of him Surely hersquos got to be right eventually

Obviously none of these predictions played out but they are still making the call that the can has been kicked down the road We will watch this space

John Hempton a few years ago predicted 50+ falls but in early 2021 decided he was wrong as quoted in an AFR article

ldquoExactly five years ago a hedge fund manager and an economist posing as a gay couple toured Sydney investigating whether Australiarsquos housing market was a bubble They decided to short it

Now the hedge fund manager behind that view Bronte Capital chief investment officer John Hempton says there is no case for positioning to benefit from a significant fall in house prices If anything he expects prices to riserdquo

AFR February 2021




18

A bit like dart board stock predictions and footy tipping competitions as it turns out the public seem to have just as good a chance of getting predictions right (or wrong)

ldquoA Budget Direct survey conducted in April found the majority thought property prices would fall over the following three to six months

ldquoOf these the vast majority anticipated an average fall of 20 or less while around 13 predicted a fall of more than 20

ldquoRoughly 20 of the nearly 1000 people surveyed figured prices would rise with 12 forecasting price rises of up to 15 and 8 forecasting rises of more than 15

ldquoThe remaining respondents said there would be no change in property pricesrdquo

The public




19

Working in Financial Advice for many years I have always struggled with investment forecasters providing market commentary but watering it down by providing four or five different scenarios with the chance of each one happening Many didnt want to make the call because these things are tough to predict but certainty is what the world craves so when these scenarios hit the media emphasis is usually given to the worst case

However what is most frustrating is that predicting what might happen is hard enough without trying to determine a percentage likelihood of each option actually happening These forecasts were confusing at best covering all bases and never actually being completely right or wrong because they never really made a call What they did contribute to was some spirited conversation but thatrsquos about it

The problem with scenario forecasters is it assumes direct links between trigger and response - the first trigger would conveniently link to a particular response and that response would lead to another response Investment markets and human behavior are way too complex and integrated to apply this linear thinking to and I have always laughed every year as the

unexpected happened I challenge you to honestly go through every year back in your memory one by one not just 2020 and what you thought would happen didnrsquot and what you thought wouldnrsquot happen did

The danger of scenario reports is that they are click-bait for the media who do not have the available brain and word space of their readers to publish long articles Instead they have to cram their words into a tiny snippet to get the click or flick that allows them to make money through advertising

It does not take a rocket scientist to know that fear sells and when the media get hold of a report they will always use the worst-case scenario even if it is a low probability They know less than 001 of their readers will take the time to find and read the report Even if they do the media game will not change and new news quickly becomes old news

In 2020 the media loved COVID fear for this reason Similarly in a property sense in 2018 60 Minutes got massive airtime across every media outlet after their Bricks and Slaughter episode which predicted 40+ falls to the property market Wersquore still waiting for that to materialise

The danger of scenarios




20

The first to appear was the report of a CBA presentation that showed one scenario of a prolonged downturn that could lead to a 32 fall in prices over three years The other scenario suggested a mere 11 fall in house prices yet thatrsquos not the one that made the headlines

The media loved this story Not only is it our biggest bank (yoursquod think they would be talking up house prices) but this was a vast and scary number This number went viral fast and I challenge you to type ldquoCBA 32 fallrdquo into Google Yoursquoll quickly see the reach it had

The second was Louis Christopher at SQM He released a similar report with one scenario suggesting 30 falls and similarly that was the one that got all the airplay Christopher then rightly spoke to media all over the country even the UK and while he would have outlined all of his scenarios all they cared about was that big number and it also went viral

In fairness he was not personally spreading the 30 theory this year he has blamed the media for not explaining his different scenarios in detail

Its not just Louis Christopher or CBA that create sensations therersquos a definite incentive for many commentators to come up with big

numbers It will lead back to more traffic to their business plus more media appearances as their comments make articles go nuts

Do we blame Louis for doing this Absolutely not he lives and breathes property data and is well equipped to model these scenarios What we as consumers need to do is take ownership of our own opinion instead of falling for media driven short-cuts We need to educate ourselves and read the actual reports

The final one is Mr Shane Oliver at AMP While we love his work it is hard to watch him talk up and down the market continually like a YOYO each year Oliver is by far one of the most quoted financial people in Australian media for a reason and when you get chatting to him for an hour as we did on the Podcast you would know he is a smart bloke across a lot of stuff One of the reasons he is quoted by the media nearly every day is because he makes some pretty big calls but who really holds him to account

But the crash never happened

There was pretty minimal property growth across the country with under a 5 price decline at the worst of 2020 Nowhere near 20-30 falls and nowhere as much growth as predicted at the start of 2020




21

A few big stories to mention and the biggest was the regional growth Areas such as Byron Bay Sunshine Coast Central Coast Mornington Peninsula Geelong Wollongong South Coast - the list goes on

These areas have always offered a superb lifestyle and fair prices for the premium end of their property markets compared to nearby capital city prices But 2020 popped that champagne to send a rocket up prices as city people did the seatreechange theyrsquove always talked about but never previously took action on

The other big story was the apartment markets in Sydney Melbourne and the rest of country to be frank They were already struggling with building issues very few investors wanted to go near them and then COVID happened In 2020 lots of new apartments that had been sold off the plan in 2016-2019 were completed This coincided with a huge drop in people wanting to rent or own them No international students at universities negative migration and the younger generation moved back home with parents or back overseas as employment dried up Vacancy rates exploded investors tried to sell causing prices to stagnate at best or fall significantly in inner city locations

I believe the final big story is ultimately the change in buyer preferences caused by the rethink of our work and life relationship Whether the Work-From-Home (anywhere) movement stands the test of the time 2021 will give us clues but more working from home is happening longer-term creating a demand for the additional space required to make that happen

This shift is enormous and compounded by those that went through multiple lockdowns or more extended periods working at home alongside their partner and kids in apartments This family may have wanted to buy an apartment when they knew they could leave it whenever they wanted but lockdown has meant that theyrsquore now willing to go further from CBDs and train stations because that journey may only have to be made two or three times a week rather than five




22

This had led buyers away from inner ring apartments to areas of the city that before COVID were seen as less desirable because of the commute logistics These areas were previously significantly discounted compared to other parts of the city not based on lifestyle benefits but because it was not a great place to get to the CBD for work This change meant prices moved significantly in places such as Northern Beaches and Cronulla in Sydney or bigger family homes in middle-ring suburbs

ldquoWhile Australia has been through the sharpest recession since the Great Depression this bleak outlook for the property market has clearly not played out CoreLogic data shows home prices jumped 08 per cent nationally in November with a rebound under way in every capital cityrdquo

Jennifer Duke SMH 6 December 2020




23

The winner has to be Chris Joye again Chris has had a knack for calling the market between 2017 and 2019 to a tee and this has continued through 2020 At the most fearful point in the year he came out to say that everyone was wrong with their huge property fall predictions Instead he predicted the price falls would be under 5 Joye was right Joye then suggested a big bounce back in the second half of the year and it came true Now in 2021 he is predicting 20-30 rises - that is one we will check next year

The other is Stuart Weymss He came out and publicly said that the big falls would not happen and wrote an article outlining the reasons why It was also in May at a time where fear was rife Good on you Stuart and we hope that you stopped many of your readers from panicking at the wrong time

Therersquos an additional gold star to be awarded this year Simon Pressely was also another who argued a case against big falls in the media

ldquoldquoSimon Pressley founder of buyers agency and research business Propertyology was one of the few forecasters who did not expect a dramatic price slump at the highest point of the pandemics first outbreak

The history books will show it as a small moment in time at the front end of an Australian property boom that commenced in the third quarter of 2019 and continued for a few years he saysrdquo

SMH 7 Dec 2020

The Gold Stars




25

httpswwwsmhcomaupoliticsfederallower-rates-will-mean-higher-house-prices- economists-20200131-p53wm4html

httpswwwwestpaccomaunewsin-depth202004how-this-downturn-differs-for-housing-market

httpswwwmortgagebusinesscomaubreaking-news14955-westpac-projects-15-rebound-in-property-prices

httpswwwbusinessinsidercomauaustralian-house-prices-property-market-coronavirus-sydney-melbourne-forecast-2020-4

httpswwwabcnetaunews2020-04-24worst-case-scenario-house-prices-fall-30pc-coronavirus-shutdown12177084

httpsaufinanceyahoocomnewscba-warns-of-32-house-price-tumble-020218800htmlguccounter=1ampguce_referrer=aHR0cHM6Ly9hcHBsZS5uZXdzLwampguce_referrer_sig=AQAAAFJKdYK9vHzd4fb_WkK8DYQi51t9pL5Fz7IES_vqU0fz6E3gpxdl6a8SN9nNu7ndZXWgzfATA7JzzMl0s2HgkIwV06nWlo142nHaXaR2GwXsFUeugx8r09FTr-rXNxiPrwnQFg714b0ei-bXHVKPvCk1q47AvgoIIAFhADSSYKx9

httpswwwsmhcomaubusinessbanking-and-financehouse-prices-could-dive-30-per-cent-in-severe-downside-scenario-20200427-p54nllhtml

httpswwwsmhcomaupoliticsfederalwhat-happened-to-the-property-price-crash-that-was-predicted-but-never-came-20201203-p56k4uhtml

httpswwwsavingscomauhome-loanshow-accurate-were-australians-house-price-predictions

httpswwwafrcomwealthpersonal-financehouse-prices-will-not-fall-sharply-20200423-p54mj9

httpswwwprosolutioncomauwp-contentuploads202006Gloomy-property-projections-are-overdonepdf

httpswwwprosolutioncomauproperty-growth-2020tl_inbound=1amptl_target_all=1amptl_period_type=3ampinf_contact_key=075430f464a3cd9158c88b4cd68589c7680f8914173f9191b1c0223e68310bb1

References




1

Regular listeners will know I have a potty mouth so Irsquom hoping yoursquoll forgive the heading But really what other word can we use when such a high percentage of forecasts are out and out wrong

In our 2020 Fool or Forecaster Report we reported that only 2 out of 16 of the forecasters we tracked predicted the property market turning point in 2019 That means 14 or 875 got it wrong and many of them got it wrong by a lot

In this report as we reflect back on the predictions made throughout an entirely unpredictable year I cannot help but wonder why anybody is brave enough to say that they know whatrsquos going to happen to the property market Yet theyrsquore still at it - as we write this report we can see that next yearrsquos report is already shaping up to be a doozy

Veronica Morgan

WHY ARE FORECASTS ST




2












3



(Dobelli p49)







(Dobelli p50)



(Oliver)






5



(Gittins)








6



Shane Oliver Ep 117








7










8









9


(Buffett)







10






of-theirhtml





Bibliography




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




2












3



(Dobelli p49)







(Dobelli p50)



(Oliver)






5



(Gittins)








6



Shane Oliver Ep 117








7










8









9


(Buffett)







10






of-theirhtml





Bibliography




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




3



(Dobelli p49)







(Dobelli p50)



(Oliver)






5



(Gittins)








6



Shane Oliver Ep 117








7










8









9


(Buffett)







10






of-theirhtml





Bibliography




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References







(Dobelli p50)



(Oliver)






5



(Gittins)








6



Shane Oliver Ep 117








7










8









9


(Buffett)







10






of-theirhtml





Bibliography




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




5



(Gittins)








6



Shane Oliver Ep 117








7










8









9


(Buffett)







10






of-theirhtml





Bibliography




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




6



Shane Oliver Ep 117








7










8









9


(Buffett)







10






of-theirhtml





Bibliography




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




7










8









9


(Buffett)







10






of-theirhtml





Bibliography




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




8









9


(Buffett)







10






of-theirhtml





Bibliography




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




9


(Buffett)







10






of-theirhtml





Bibliography




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




10






of-theirhtml





Bibliography




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




11






2020Forecasts


SMH February 2020

Chris Bates




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




12









13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




13





SMH 1 February 2020




SMH 27 April 2020






14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




14




CBA 6 -10-30 falls

NAB 41 -10-15

ANZ 8 -10

WPC 5 -10

AMP 8-10 -20

SQM 7-11 -30

The bank backflip










15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




15









16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




16




The experts





SMH 7 December 2020




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




17


The doomsdayers






AFR February 2021




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




18






The public




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




19












20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




20














21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




21









22







23






SMH 7 Dec 2020

The Gold Stars




25













References




22







23






SMH 7 Dec 2020

The Gold Stars




25













References




23






SMH 7 Dec 2020

The Gold Stars




25













References




25













References

Documents

FOOL OR FORECASTER REPORT