Melbourne house prices set to fall during 2015?: academic research

Melbourne house prices set to fall during 2015?: academic research
Melbourne house prices set to fall during 2015?: academic research

Melbourne house prices are tipped to fall 9%, while Sydney prices will climb further and then hold their value, analysis for an unpublished paper under review for the Economic Record has found.

It covers price forecasts for freestanding houses. 

Sydney prices would "continue to rise till the end of 2015 then start plateauing with no anticipated sharp falls".

But Melbourne prices could begin falling almost immediately, falling 9.2% in the year ahead, while Brisbane's prices will fall 8.1% and Perth's 5.2%, according to the analysis.

Adelaide, Hobart and Canberra will continue to climb slowly.

The research by Abbas Valadkhani of Swinburne University, Ronald Ratti from the University of Western Sydney and Greg Costello from Curtin University looked at monthly house price data back to 1995.
 
"This doesn't predict every see-saw movement," Dr Valadkhani told Fairfax Media's economics editor Peter Martin.
 
"It only predicts the general direction of prices. If it could predict exact movements we would be multimillionaires and wouldn't need to work in academia. The actual prices could be a little bit above or a little bit below the trend we are predicting."
 
The authors believe their model is the first to be updatable each month, possibly providing advance notice of turning points.

Asked by Peter Martin why Sydney house prices would keep climbing and then plateau while Melbourne prices fell, Dr Valadkhani said the model didn't give reasons. However, its predictions were consistent with  continuing shortages and oversupply.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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Melbourne Houses

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