SQM Research is the latest to do an about face on previous doomsday forecasts, now predicting a rebound more in line with our prediction made in September of 10% growth in 2021. SQM are notable for making accurate predictions. We have great respect for Louis Christopher and his team. However, SQM did make a rare mistake predicting in April a decline of up to 30%, thus proving even the best are fallible.
Their predictions for 2021 still look slightly conservative to us.
Notable points from SQM’s modelling:
1. All capital cities to rise in 2021.
2. Perth is the front runner, with 12% predicted growth. Every man and his dog has jumped on the Perth bandwagon recently after values have remained stagnant for over a decade. Let’s hope the long term returns are there for investors.
3. Sydney and Adelaide to be 2nd & 3rd strongest performers.
4. Melbourne to bring up the rear with a mere 2-6% growth. We think this is conservative based on 0.7% growth clocked in November. Melbourne was rising rapidly pre-covid, and counter-intuitively there is more upside given the market fell further than any other. We think Melbourne lockdown #2 is causing a level of bias in many downside predictions. That said, we’re predominantly based in Melbourne and may have our own bias.
We shall see in 2021!