BIS Shrapnel’s median house price forecasts While other economists and forecasters may comment on residential house prices, few make definitive forecasts, particularly beyond the next twelve months. BIS Shrapnel is the only company which produces residential house price forecasts over a three year horizon and places them in the public domain in June each year. Forecasts provided by other businesses have often been confused with BIS Shrapnel’s forecasts, and some of our previous forecasts have been misquoted, or referred to in different time periods in the media. In order to ensure any debate is factually correct, we have prepared our forecasting record showing our median house price forecasts as produced in our June report each year, compared to the actual result for median house prices. These comparisons are shown in the following charts. An analysis of the first chart comparing a national average for BIS Shrapnel’s capital city median house price forecasts indicates that we have generally been conservative.
While the forecasts in the 2003 and 2004 reports were closer to the mark, we were particularly conservative in our 2005 and 2006 reports, understating the upturn in prices. While BIS Shrapnel forecast the run up in interest rates through the forecast period in these reports, we underestimated the price growth that would take place in this environment.
In our 2008 and 2009 reports—a period of high uncertainty due to high interest rates and subsequently the worst of the Global Financial Crisis—BIS Shrapnel’s forecast median house prices at the end of the three year horizon were very close to the actual result.
Forecasts from our 2010 report were above actual price growth, largely due to an overestimation of the strength of the Australian economy in the forecast years. Subsequent results from the Census also suggests that underlying demand and the dwelling balance in selected states was lower than initially anticipated, which reduced some of the price pressures.
The forecasts published in reports over 2011 to 2014 are generally on track in most capitals, except in Sydney, and our 2013 forecast for Melbourne, where we have underestimated price growth, with low interest rates having a greater impact than expected on these higher priced markets.
In our most recent 2015 report, the forecast trend at the national level is for price growth to moderate over 2015/16 and decline modestly in 2016/17 as rising supply removes price pressures, while anticipated rises to interest rates rise cause affordability to deteriorate from current attractive levels. The results differ from city to city, but are generally expected to follow the same trend as outlined above for the national aggregate.
Comparison of average annual median house price growth (%) forecast in each of BIS Shrapnel's reports versus actual median house price over the three year period, Australia
700.0
Median House Price ($'000s) Forecast
650.0
Actual 2003
600.0
2004 2005
550.0
2006 500.0
2007 2008
450.0
2009
400.0
2010
350.0
2011 2012
300.0
2013 250.0
2014
200.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: REIA, BIS Shrapnel
Quarter Ending June
Comparison of average annual median house price growth (%) forecast in each of BIS Shrapnel's reports versus actual median house price over the three year period, Sydney Median House Price ($'000s) 1000.0
Forecast
900.0
Actual 2003 2004
800.0
2005 2006
700.0
2007 2008
600.0
2009 2010
500.0
2011 2012
400.0
2013
300.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: REIA, BIS Shrapnel
Quarter Ending June
2014
Comparison of average annual median house price growth (%) forecast in each of BIS Shrapnel's reports versus actual median house price over the three year period, Melbourne Median House Price ($'000s) 700.0 Forecast 650.0
Actual 2003 2004
600.0
2005 550.0
2006 2007
500.0
2008 450.0
2009 2010
400.0
2011 350.0
2012 2013
300.0
2014 250.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: REIA, BIS Shrapnel
Quarter Ending June
Comparison of average annual median house price growth (%) forecast in each of BIS Shrapnel's reports versus actual median house price over the three year period, Brisbane Median House Price ($'000s) 600.0 Forecast 550.0
Actual 2003 2004
500.0
2005 2006
450.0
2007 400.0
2008 2009
350.0
2010 300.0
2011 2012
250.0
2013 200.0
2014
150.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: REIA, BIS Shrapnel
Quarter Ending June
Comparison of average annual median house price growth (%) forecast in each of BIS Shrapnel's reports versus actual median house price over the three year period, Adelaide Median House Price ($'000s) 500.0
Forecast
450.0
Actual 2003 2004
400.0
2005 2006
350.0
2007 300.0
2008 2009
250.0
2010 2011
200.0
2012 2013
150.0
2014 100.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: REIA, BIS Shrapnel
Quarter Ending June
Comparison of average annual median house price growth (%) forecast in each of BIS Shrapnel's reports versus actual median house price over the three year period, Perth Median House Price ($'000s) 650.0 Forecast 600.0
Actual 2003
550.0
2004
500.0
2005 2006
450.0
2007 2008
400.0
2009
350.0
2010 300.0
2011
250.0
2012 2013
200.0
2014
150.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: REIA, BIS Shrapnel
Quarter Ending June
Comparison of average annual median house price growth (%) forecast in each of BIS Shrapnel's reports versus actual median house price over the three year period, Hobart Median House Price ($'000s) 450.0 Forecast
Actual 2003
400.0
2004 2005
350.0
2006 2007
300.0
2008 2009
250.0
2010 2011
200.0
2012 2013
150.0
2014 100.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: REIA, BIS Shrapnel
Quarter Ending June
Comparison of average annual median house price growth (%) forecast in each of BIS Shrapnel's reports versus actual median house price over the three year period, Canberra Median House Price ($'000s) 600.0 Forecast 550.0
Actual 2003 2004
500.0
2005 450.0
2006 2007
400.0
2008 350.0
2009 2010
300.0
2011 250.0
2012 2013
200.0
2014 150.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: REIA, BIS Shrapnel
Quarter Ending June
Comparison of average annual median house price growth (%) forecast in each of BIS Shrapnel's reports versus actual median house price over the three year period, Darwin Median House Price ($'000s) Forecast 650.0
Actual 2003 2004
550.0
2005 2006 2007
450.0
2008 2009 350.0
2010 2011 2012
250.0
2013 2014 150.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: REIA, BIS Shrapnel
Quarter Ending June
