Martin North declines to take up 6 to 1 odds bet from The Kouk on house price collapse possibility

Martin North declines to take up 6 to 1 odds bet from The Kouk on house price collapse possibility
Martin North declines to take up 6 to 1 odds bet from The Kouk on house price collapse possibility

Martin North, the founder at Digital Financial Analytics has declined to take up the bet proposed by economist Stephen Koukoulas over his 45 percent house price fall forecast possibility.

The forecast was aired on Sunday night's 60 Minutes.

Koukoulas, possibly channelling Rory Robertson's infamous bet with Steve Keen, made the offer of a bet to North yesterday

North quickly advised he's not a betting man, "ever."

Martin North declines to take up 6 to 1 odds bet from The Kouk on house price collapse possibility
North is a data scientist.

Although heavily edited on the Channel 9 show, North contemplated house prices falling by up to 45 percent given one scary scenario.

Koukoulas, noting it was gripping viewing and a quite fantastic story, suggested forecasts without any skin in the game are often compromised.

"It is easy to construct a headline grabbing forecast for a significant move in markets, including house prices for example, but when they fade into oblivion, there are no implications for the forecaster.

"Forecasts really only has validity if the forecaster has an interest in the forecast being correct.

"In other words, would the forecaster really make that forecast if they put their money where their mouth is?

"To that end, I would like to offer you the following wager:

"I will offer 6 to 1 ($15,000 to $2,500) that Sydney or Melbourne or national wide house prices will not fall by more than 35 per cent from their peak at any stage before and up to the December quarter 2021."

He suggested the measure be based on the Australian Bureau of Statistics Residential Property Price Indexes, Eight Capital Cities, Catalogue No. 6416.0.

"I am offering very generous odds (6 to 1 which is above your 5 to 1 probability)," he suggested.

Outspoken economist and consistent housing bubble denier Rory Robertson bet Steve Keen in 2008.

In 2008, Keen said house prices would fall 40 percent once the financial crisis had "washed through the system".

In November 2009, he walked up Mount Kosciuszko wearing a T-shirt that said: "I was hopelessly wrong on house prices!" after losing the bet with Macquarie's Rory Robertson.

Keen kept up his abridged forecast for some time, saying the cash splurge undertaken by the Rudd-Swan government could never have been anticipated.

Robertson has retired, but long argued against the doomsayers.

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.

Tags: 
House Prices Property Forecast

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