We all knew this transition effect was occurring, and our forecasts showed substantial falls in house-building in the second half of 2000, but not falls big enough to outweigh everything else that was going on in the economy. The size of these falls was truly outside the range of previous recorded experience, and that is always difficult to forecast.
Incidentally, similar large shifts in expenditure on housing did not happen in the other countries we had looked at that introduced GST (see Diagram 1).