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Sep 27, 2022

Here’s what passes for analysis in Australian real estate: if Event A coincides with Event B, then Event A must have caused Event B.

This is what I call kindergarten analysis and we get a lot of it in the housing market.

It ignores the reality that there is also Event C, D, E , F and G taking place – and some of those may have had an influence on causing Event A.

The worst example of this shallow analysis is playing out in mainstream media every day at the moment.

Event A is rising interest rates.

Event B is that prices, apparently, are falling in some markets.

According to most economists and journalists, this surely must mean that rising interest rates have caused prices to fall – even though that has never happened before in past property cycles.