Michael Marquette’s “View from the Bridge”
I read the Sydney Newspapers on the weekend and couldn’t help but feel that the public were being conned. The lead story for real estate was the “booming” real estate market with numerous photographs of happy home buyers who had paid 5-10% above reserve price to ensure they received the First Home Owner’s Grant (FHOG) which ends on September 30, 2009.
There was no discussion of the stupidity of buyers who had spent an additional $30,000 to $50,000 to purchase these homes in order to receive the $14,000 FHOG – I would gladly give someone a $14,000 payment if they gave me $30,000 or $50,000 extra in return. The media continues to sensationalize the news to sell newspapers and they continue to pitch their information at the lowest common denominator.
It seems to me that many first home buyers were “tricked” and their fear pushed them into making rushed decisions. Statistics can be manipulated to paint any picture that suits the party putting them forward and the statistics around housing have suffered in the same way. Headlines which have declared “a boom” in the property market are not only incorrect but are grossly misleading.
Without question the activity in the housing market has been in the first home buyer area – around or less than $500,000. This segment does not speak for the entire housing market and those selling properties above this price, especially above $1 million have experienced anything but a boom. The Luxury Housing market around the world has taken a tumble and prices are not at record levels or even at the same point as they were just two years ago.
It’s almost impossible to rely on any information being passed on through the mainstream media. Once you sift through the sensational headlines, odd great result and agent hype the fact is that the real estate market is extremely segmented and properties of different values across different suburbs, cities and states are experiencing completely different things.
I received an email newsletter from Domain.com.au yesterday that disappointed me greatly. The heading for the email was “Another property boom, house at half price, rates trump grant”. When I opened the email I found that the heading for the story about a property boom was actually “Will a booming population mean another property boom?”
There is a vast difference between declaring a property boom (there isn’t one) and discussing if a boom may or may not happen. It is becoming more and more important for readers to carefully consider what the motive might be for a reporter or news source to report with bias. Does the news source own a newspaper or internet site that would benefit by talking up the market and giving misinformation? In Australia our media sources certainly do!