The paper addresses the puzzling phenomenon of the ubiquity of economic forecasting, of which property market forecasting is but one instance, on the one hand, and the unreliability of such forecasts, on the other hand. The paper explains why property market forecasts fail, in a non-trivial sense, and why this problem is irredeemable.
This was a conceptual paper and was based on original thought and literature review.
This paper attributes the failure of property market forecasts to the inappropriate application of the methodology of the natural sciences to the social sciences by mainstream economics. Specifically, the problem is located in the positivist philosophy and the assumptions of methodological individualism and rational choice theory underlying neoclassical economic theory.
The paper makes an original contribution by clearly showing why and how the methodology of the natural sciences, especially physics, has been applied to economics and property market analysis, why this is inappropriate and why it leads to failure. The paper introduces a debate that has hitherto been mostly confined to philosophy and mainstream economics into the property or real estate discipline and in a manner that is accessible to a non-philosophy audience.
