Ben Udy

Yeah, I have dimly been described as a property pessimist before, sir, and now certainly is a fitting description.

Yeah, that's right.

Sort of the default way of thinking about housing markets is prices keep going up, but that's certainly not always the case.

Particularly in Australia, we've seen a number of considerable housing downturns, even just in the last five years.

And so you do always have to have one eye on the data to try and get a sense of where prices are actually going to go.

Absolutely.

We got it very wrong.

Almost all economists got it very wrong.

There's a range of reasons for that.

In my lifetime, the most significant reason

recession or economic downturn that I had experienced prior to the pandemic was the global financial crisis.

My framework for thinking about recessions was really heavily influenced by that.

In particular, you know, lots of economists, ourselves included, were expecting unemployment rates to go to above 10% in lots of developed economies.

I think we had 15% penciled in for Australia.

because we didn't have a good way of understanding what impact the pandemic was going to have on the labour market and on the economy.

Obviously, as it turned out, the government did support jobs, the unemployment rate never rose too high, and interest rates fell really sharply.

And so while there was some small house price falls in the initial months of the pandemic, once

people were able to go out and start viewing homes again.

They had this extra money saved up.

They still had their jobs for the most part because not that many people had been made unemployed.