Price Forecast

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 Get the good oil from SQM Research's annual Boom &amp; Bust report.
"As the table below reveals, SQM Research forecasts an acceleration of dwelling price, with Sydney dwelling prices forecast to rise 11 percent to 16 percent for the 2017 calendar year," the report states.
"The capital city average forecast is for dwelling prices to rise 6 percent to 10 percent."
 Click to enlarge
<img src="/images/2016/11/17/unnamed.png" alt="">
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<div>Source: SQM Research</div>
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<div>SQM has an impressive track record being more right than the rest, even when going against consensus.</div>
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<div>Purchase your copy of the detailed Boom &amp; Bust report <a href="https://www.sqmresearch.com.au/boombustreport.php" target="_blank">here</a>.</div>
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PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
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Where to for property prices in 2017?

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EXPERT OBSERVERS
The housing market remains weak, and many key indicators are around the worst levels in a number of years. However, the downturn is still tracking in line with our previous forecasts, and our outlook is relatively unchanged. 
We still anticipate prices will keep falling through 2018 and 2019, and we have extended our forecast into 2020, where prices are likely to remain subdued.
Nationwide, we continue to expect prices to fall around 4% in 2018 and 2% in 2019.
Click here <a href="https://www.propertyobserver.com.au/images/2018/9/27/state-forecast.jpg" target="_blank">to enlarge.</a>
<a href="https://www.propertyobserver.com.au/images/2018/9/27/state-forecast.jpg" target="_blank"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/9/27/state-forecast.jpg" alt=""></a>
 
We have extended our forecast to 2020, and we think prices will end that year flat from a year ago. We still expect Sydney and Melbourne prices to fall around 10% peak to trough, while other markets will perform better.
Click here <a href="https://www.propertyobserver.com.au/images/2018/9/27/house-prices.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/9/27/house-prices.jpg" alt="">
 A number of headwinds will continue to weigh on the market, including further credit tightening, out of cycle rate increases, and eventual RBA rate hikes. But despite these challenges, the risks around financial stability have not worsened to date.
Credit availability, or the lack thereof, is also an issue for housing construction. 
The current round of projects is already locked in, with a record level of investment in progress. But we have concerns over the next round of projects, and expect to see construction fall steadily through 2019 and 2020.
Daniel Gradwell and Joanne Masters are economists at ANZ.
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Prices likely to remain subdued into 2020: ANZ Research

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Westpac economists have gone full circle in their house value forecasting, with prices to soar from December 2021.
They had been expecting between April 2020 and June next year, the national price index to fall by 10 per cent.
But <a href="https://www.urban.com.au/news/117231-westpac-soften-house-price-forecast-now-predicting-a-total-five-per-cent-fall#:~:text=17%20September%202020-,Westpac%20soften%20house%20price%20forecast%2C%20now%20predict%20five,cent%20peak%20to%20trough%20declines&amp;text=They%20had%20been%20predicting%20a,over%20the%20following%20two%20years." target="_blank">last week they updated their forecasting</a>, stating prices would only drop five per cent between April and June next year.
There have already been -2.3 per cent declines nationally, according to CoreLogic's data.
And now they're forecasting a much stronger rebound, accumulating 15 per cent over the two years from December next year.
"Apart from Victoria, where we expect prices to fall in the December quarter, we expect that in the December and March quarters in the other states, prices will be relatively stable with some upside pressure."
Evans says the June quarter and September quarter 2021 when markets have to deal with $240 billion of deferred loans currently on the balance sheet of the banks.
"That's about 620,000 borrowers, $180 billion in mortgages", Evans says.
"It's our view that risk will be well managed", Evans suggests, adding that there will be restructuring of loans, banks will be patient, and at the time there will be modest downward pressures on prices.
"But broadly speaking, The sort of fears that some of had, that that phase will be a very negative phase for house prices, I think will be unfounded."
Evans says the final phase will be that interest rates are at record lows, the overhang of the deferred loans will be behind us, and the central bank and the government will be focused on the economy, not on constraining bank lending or on over regulation
"That will be a very positive environment for the housing market."
To listed to Westpac economist Bill Evans full update, watch below. 
<iframe src="https://www.youtube.com/embed/FA3Aaet9tEw" frameborder="0" width="460" height="315"></iframe>
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Westpac's full circle - forecasting 15 per cent house gains post COVID

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My open letter and offer to DFA’s Martin North – Skin in the game on house prices I have sent this to Martin North, founding Principal, Digital Financial Analytics.
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Dear Martin Congratulations on your cameo on the TV program 60 Minutes. It was gripping viewing and a quite fantastic story. I note with a huge amount of interest your <a href="https://www.urban.com.au/news/89508-45-percent-housing-price-collapse-was-least-likely-scenario-martin-north-on-the-60-minutes-washup" target="_blank">forecast for property prices to fall by “40 to 45 per cent”.</a>
It is a big call and certainly grabbed the attention of many in the public.
I note also that on your blog, you suggest the quote which included that forecast was not given the context you attached to it, namely, you rated it “only a 20 per cent chance” and that the 40 to 45 per cent price fall would be “over 3 years or so”.
That context is important.
Over the many years I have been making forecasts for the economy and markets and seeing others do the same, I find that 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. The measure will be based on the Australian Bureau of Statistics Residential Property Price Indexes, Eight Capital Cities, Catalogue No. 6416.0.
This means that if, at any stage the price index for any of Sydney, Melbourne or the aggregate eight capital cities prices is down 35.0 per cent or more, I will give you $15,000 cash. Conversely, if by the time the December quarter 2021 data are published and the peak to trough decline is 34.9 per cent or less in Sydney, Melbourne or the eight capital cities, you have to give me $2,500.
How is that for generous and a wonderful chance to leverage your forecast into some cold hard cash?
Not only am I offering very generous odds (6 to 1 which is above your 5 to 1 probability), but I am tapering your forecast by a massive 5 to 10 per cent from the 40 to 45 per cent fall you were forecasting on the 60 Minutes program (prices only need to fall 35 per cent) and I am offering three possible markets for that to occur (either Sydney, Melbourne or the eight capital cities measure) and for the peak to trough being around 4 years, not the 3 years you suggest.
As an additional bet over and above that offering, I will offer 2 to 1 ($20,000 to $10,000) that at no stage from the peak in prices and the December quarter 2021, Sydney or Melbourne or national wide prices drop more than 22.5 per cent. That is a very generous 2 to 1 for a fall of just half of your forecast decline. If at any stage dwelling prices fall by 22.5 per cent or more, you collect $20,000, if they don’t you pay me $10,000.
How is that for amazingly generous odds and for you to have a great return even if you are half right?
The June quarter 2018 residential price series is released this week (18 September 2018) which will not change my offer but will add a little bit more information on the extent of the current price down turn.
This offer is open until 5.00pm, Canberra time, Friday 28 September 2018.
I look forward to hearing from you.
I will make the details of this offer and your response to it public as an additional part of establishing our credibility in the all important forecasting space.
Kind regards
Stephen Koukoulas
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Click here to read the <a href="https://thekouk.com/item/631-my-open-letter-and-offer-to-dfa-s-martin-north-skin-in-the-game-on-house-prices" target="_blank">Koukoulas blog post.</a>
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