Blog - Residential
MEDIA HYPE – LOOK BEYOND THE HEADLINE
In property everyone has an opinion and no one more so than the media who report the ‘news’ in the property sector. Their job is essentially to sell papers and drive clicks so sensationalism reigns supreme. This isn’t an attack on the media, more so a public service announcement about reading content.
The media definitely influences the property market and in everyday life I have come across people (even friends of mine) who regurgitate headlines seemingly without having read the details in the article. In November last year Domain ran an article with this headline “Sydney’s growth run is over in 2016” and lead off with the following paragraph:
“Sydney’s property prices grew 16 per cent over 2015, but the market is expected to slump to just 4 per cent growth next year, new forecasts show”
In the bigger picture yes 4% growth is a slowdown from the dizzying heights of the previous couple of years however the content and its message is seemingly at odds with the headline.
Just this week I have come across the following headlines “Sydney house prices drop 3 per cent” and “The house price correction Sydney had to have”. I’d encourage you to read both articles as there are some interesting and pertinent points in there as to cause and effect. I’m going to cherry pick a few quotes I liked from these articles; but again I’d advise reading them in their entirety
This is from Dr Andrew Wilson:
“the cause of the decline was sentiment-driven, partially due to banks increasing interest rates for both investors and home buyers in October, he said.
“But the underlying dynamics are still quite strong in the housing market, this is not a correction driven by the fundamentals,”
Another one from Stephen Nicholls
“Prices had risen so much – an extraordinary 52.6 per cent over three years. The 14.8 per cent growth last year was beyond everyone’s expectations”
Bigger picture; this 3% drop in the December quarter is a reasonable reaction after an amazing three and a half year growth cycle.
With the underlying fundamentals still strong it will be interesting to see what reaction buyers and sellers have early on in 2016. Having spoken with a number of agents and buyers in the last couple of weeks there is a sense of rationality out there and definitely still a healthy demand for property.
So next time you see an attention grabbing headline, take the two to three minutes to read the article as you may only be getting some of the story.