Slow Sunday arvo here, so been watching a few old golf videos. If you didn't know any better, watching old vids of Lee Trevino's swing with his awkward ducking head movement you might be disinclined to believe that he was anything more than a mediocre pro golfer, yet as a six time major championship winner he was one the sport's greatest ever competitors.
In short, the most powerful central bank or econometric modelling can't forecast accurately what will happen over any meaningful time horizon, and neither can you!
I haven't read the report in question, so am in no position to critique the content, but to his credit Lindsay David of LF Economics has previously made predictions that are specific, measurable and time-bound, and so his predictions can be judged accordingly.
On the other hand figures released by Residex at the end of last week showed that Sydney's median house price has increased from $668,000 at the end of 2010 to $1,058,500 by the end of October 2015, an increase of more than 58 per cent or nearly $400,000.
Buried under the emotive rhetoric Soos has made a number of robust arguments, in particular the illusory nature of housing shortages, which are seemingly apparent when the economy is humming along, but can wondrously vanish into thin air when market downturns happen.
These simple points highlight the perennial challenges facing macro property market research reports and forecasts: market timing and granularity.
In London we have heard crash predictions for at least the past decade-and-a-half, while despite downturns and recessions house prices in some boroughs have tripled...and still there has been no crash.
The obvious point here being that there is no "Australian property market", rather a series of sub-markets which cover 9.6 million dwellings and demonstrate very different characteristics and fundamentals.
Having observed the history of bubble predictions Scott Sumner once concluded that:
"If we notice market movements that seem to align with our initial forecasts we tend to pat ourselves on the back and assume the forecasts were correct. This is one of many cognitive biases that human beings are prone to. Pay no attention to bubble forecasts. They are useless. Indeed the entire bubble concept is useless."