Aussies should be wary of housing crash forecasts

PHOTO: Housing crash

Recent restrictions on in-house and on-site auctions are making some nervous about the housing market, but speculative reports of a coming crash in values are flawed, writes Aidan Devine.

OPINION

Coronavirus has up-ended almost every part of our lives so it seemed inevitable it would come for our homes.

There’s speculation home prices could fall up to 20 per cent due to fallout from the pandemic and understandably people are worried. But I’d caution against reading too much into early predictions.

Economists who specialise in housing market analysis can take months to develop price forecasts but new virus predictions are being thrown about by so-called experts within hours of government announcements.

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I’d question exactly what “experts” who have put a number on coming price drops are basing their predictions on since there’s little historical precedent for the kind of changes we’re experiencing.

And let’s keep in mind that our biggest property research companies and lenders, who often invest the most resources into developing predictions, have yet to issue comprehensive new forecasts.

I think it is fair to expect prices to take a hit but anyone putting a precise number on those decreases is making pure guesswork at this stage.