PHOTO: DOMINIC ZAPATA/STUFF There’s good reason to think the current claims suggesting a decrease in house prices could be wrong.
OPINION: Economists often get it wrong. There’s good reason to think that the current claims suggesting a decrease in house prices could be incorrect.
That might sound ironic, coming from an economist. But, let’s look at the facts.
Economists spend a lot of time forecasting the future. But, when you look back at previous predictions, especially in uncertain times, we often get it wrong.
In January 2009, Stuff quoted Westpac economist Dominick Stephens. The article read that he “expects the decline in housing prices to continue through 2009.”
“He’s picking it could be 2012 before they regain their 2007 value. `Prices are too high relative to rents and incomes,’ … ‘I’d sell now. Prices are still over-valued.”
Later that year, the median New Zealand house price made a complete recovery and set a new record high of $475,000 that November.
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