Australian consumers collectively have shrugged off the negative forecasts of economists, with a key consumer sentiment survey showing that more people expect house prices to rise than fall in 2023.

The Westpac-Melbourne Institute House Price Expectations Index shows a sharp uplift in the public’s property price expectations, with the index surging 27.6%.

This is at odds with high-profile economists who predict “the downturn” will continue, but consumers have a better track record in forecasting property prices than bank economists.

Westpac senior economist Matthew Hassan was left baffled by the shift in consumer sentiment and claims consumers will be disappointed – but Hassan has a particularly poor record in predicting house prices.

Westpac forecast that Australian property prices would fall 10% in 2020, but prices rose. The bank predicted a 4% rise in prices in 2021, but they increased more than 25%.

Hotspotting and other specialist real estate analysts like Louis Christopher of SQM Research and Simon Pressley of Propertyology are forecasting price growth in 2023.