Is the media creating the current property downturn? | PROPERTY INSIDERS [VIDEO]

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.