Welcome to this fortnights blog.
The title of this blog is from a quote made famous by Mark Twain and it resonated with me when I read some recent statistics on the Australian property market. The data keeps coming in from overseas banks telling us that our market is going to correct or as Steve Keen has been saying since 2010, its going to collapse! He was later made to admit he was wrong and pay out on the bet he made.
The problem is, since 2010 real home values in Sydney have gone up by approximately 40%, while Melbourne has increased approximately 30%. That is REAL home values, after inflation.
Another prediction was made again last week by UBS who called the top of the market based on a ‘69 chart deep dive’. Why did they call it? Because of the charts of course, backed up by clearance rates dropping by almost 10% that week. Now in and of itself that may well have been a signal, however like most economists that don’t specialise in property, or are based overseas, it seems as though they didn’t bother talking to anyone on the ground.
What did you get up to last weekend? Take the Monday off before ANZAC day possibly, or go away for the long weekend? I didn’t, but many of us did.
Not exactly your average weekend of auctions.
So the moral of the story is this. Data is great, it helps us make educated assumptions on future performance. However, data alone cannot drive all decision making. It has to be combined with local market expertise by people focused on the asset class.
Thanks again for taking the time to read our blog.