Treasury’s house price claims debunked

In last week’s Budget Treasury predicted that after rising by 17% in the year to June, average house prices around the country would essentially sit still for the following years after 2022, rising 2.1% then 2.1% then 2.5%.

Alexander says while Treasury’s forecasts cannot be outright dismissed, they appear to be driven by a high level of confidence in the effectiveness of the Government’s changes to the bright-line test and tax deductibility, alongside the 40% minimum deposit now required from investors.

Treasury’s claims he debunks

1. All forecasts of flat to falling house prices since the late-1980s have been wrong. “In that light, Treasury’s predictions fall into the category called ‘extraordinary’ but for which it offers no extraordinary proof/reasoning.”