We’re suffering a crisis of confidence and in my mind the media has a lot to answer for.
Is the media reporting consumer sentiment or is the media’s negative sentiment creating a crisis of confidence in property?
You can’t buy a paper or go on line without a headline warning us that property Armageddon is around the corner.
Sure, there’s a credit squeeze, but the average consumer has lost their confidence because of the media.
And the media keeps looking for experts chasing a headline.
Watch this week’s Property Insider video as Dr. Andrew Wilson chief economist at My Housing Market and I discuss this.
Watch us discuss:
- While the fundamentals are relatively easy to quantify and examine – consumer behaviour is the X factor – hard to predict
- Worse with the 24/7 news cycle
- Why the media loves hotspotting – it’s a bit like stock picking
- The market turned around last year after that famous 60 Minutes program in October last year. Martin North gave 4 scenarios but they honed in on the worst scenario
- Many of those who make predictions don’t have skin in the game – or come from a general economic or stock market background not property
- Steven Keen got a lot of publicity
- in 2008 in midst of GFC said property prices would fall 40% – lots of news coverage – prices fell 5.5%
- Had to walk 200km from Canberra to Mt Kosiosko wearing a T shirt saying: “I was hopelessly wrong on home prices! Ask me how.
- Said he got the timing wrong – he said prices would fall 20% in 2011 and the market boomed – but got lots of publicity
- Some say I’m permanently optimistic about the property markets – but that’s not correct – I’m realistic – in fact I’m pessimistic about more locations that I think will do well – only 1% of properties are investment grade. 10 million properties in Australia avoid, regional, main roads most suburbs
- Perma Bears – Doomsayers make money from their predictions
- Harry Dent is back again in Australia
- Confirmation bias – you read things to confirm your preformed beliefs
- The rabbit hole of Google – you’ll keep reading articles that confirm what you just read.
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