Real estate experts have defended inaccurate forecasts for Perth's property market, claiming the unusual economic circumstances could not have been foreseen.
Residential property forecaster BIS Shrapnel predicted in June 2010 that the median Perth house price would rise 8 per cent a year for two years, taking it to $580,000 by 2012.
Managing director Rob Mellor conceded yesterday that Perth's median house price had actually dropped about 5 per cent in this time, taking the median to $480,000.
Mr Mellor said the forecast made two years ago was about $100,000, or 18 per cent, too high.
He defended the inaccurate prediction with claims that no one could have anticipated the scale of the global financial crisis.
Despite the criticism, BIS Shrapnel is standing by a relatively bullish outlook for the Perth market.
BIS Shrapnel's recently revised forecast puts Perth median house prices at $580,000 by mid-2015.
Australian Property Monitors have also made some bold, but wrong, real estate predictions.
About eight months ago it predicted local median house prices could jump by up to 10 per cent this year.
However, APM conceded yesterday that its own figures showed the increase was only 1.7 per cent so far.
APM had predicted a similar increase in the first half of last year, when its own figures showed that prices actually dropped about 3 per cent.
Senior economist Andrew Wilson said Perth's market had been affected by unusual factors including the GFC, the mining tax debate and an unexpectedly big downturn in consumer sentiment.
"It is crystal ball gazing to an extent because we are hostage to what is happening in the economy in Australia and internationally," he said.
Dr Wilson said the Perth median house price was currently $535,000, which is well above the $480,000 median estimated by the Real Estate Institute of WA.
He said median values varied according to the calculation method.
The Housing Industry Association said in October last year that the market had shown the "classic signs" of bottoming out.In April approvals had slumped to a 30-year low. But it was correct in picking the bottom of the sales market, which hit a low of 784 sales in September last year.
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