As they say, ‘You can’t believe everything you read in the media’, which means it’s important to do your own research and due diligence if making any form of investment. In this week’s issue JO VADILLO from Advocate Property Services provides some sage advice on how to decipher truth from fiction when it comes to media reports on the state of the property market in Australia
If you were not already aware, doom and gloom headlines are designed to ignite fear and interest. They are there to entice you to click on a link, which equates to the media outlet receiving more views.
The more views the media can attract means their advertisers are exposed to increased reader numbers which leads to advertisements reaching a greater audience. The bigger the audience the greater advertising sells for. It’s just how the media works.
So when the headlines go something like this….
‘Property housing bubble about to burst!’
‘Houses will plummet by 40% in the next 12 months’
‘Investor confidence down’
Don’t panic if you are a property owner. These are the same headlines that have been rolled out by the media (or variations thereof) for years on end. Insert yawn here!
Often the theme is repetitious and boring, unrelated to the article content and often not even factual or researched.
Attention grabbing headlines are not a new concept, they are called click bait and from the beginning of print media time – headlines are what sells – it is just more of a digital offering these days.
The beauty of online media is that they can also change the headlines now to test what results in more click-thrus without altering the body of content.
So, is the property market in a free falling doom and gloom cycle?
The Australian market is vast and within every market you have very different locations, budgets, opportunities and offerings.
The question shouldn’t be whether you buy, but WHERE you buy.
There are always opportunities to be made. The greater mass of the population will be atrophied by fear when the media starts to drum up the no confidence vote.
The economic problem with buying property only when there are hordes of other investors doing the same is that you have a lot of competition. Prices are driven up, best deals swept up swiftly and you’ll be swimming and competing amongst the masses.
One of my favourite quotes from one of the world’s richest men, Warren Buffet, is “To be fearful when others are greedy, and greedy when others are fearful”.
Be wary of media driven sentiment
Once upon a time I worked in the media and still have a lot of contacts in the industry.
Earlier this year a national commercial television news program ran a big expose on the demise of property on a national scale. It was scary viewing, sensational and outrageous, but at the same time easy to understand why less informed people panic.
What happened behind the scenes was that the Producers of the show were chasing commentary from within the property industry to back up their claims.
They clearly struggled as there were no notable industry insiders – not even statisticians who could substantiate the headline.
They found a Sydney based agent who confirmed his local area was experiencing longer days on market for sales, it was hardly ground breaking viewing but rather fear mongering.
And guess what, in the lead up to the expose the network was peppered with advertising to suggest Armageddon was on the horizon and any home owner or investor simply had to watch this report.
The ads = viewers and viewer numbers = more advertiser spend.
If fear overwhelms you and you own your own home any fluctuation or ‘correction’ in markets really should be a wave you simply ride out.
But as Warren Buffet stated, ‘Save the fear for when everyone else is being greedy’!
About Jo Vadillo:
Jo Vadillo is the owner and Director of Advocate Property Services Pty Ltd. She works with investors and homeowners to source new and existing properties that meet the best investment credentials to build a prosperous property portfolio for their clients. Jo is also a Board member of My Property Circles and runs Property Women, an organisation aimed to educate women on their journey to property success.
Jo is an author, mentor, public speaker, fierce negotiator and a terrible cook. When not immersed in her own property dealings and that of clients, Jo and her husband Greg are big travellers and go everywhere as an entourage with their 3 young sons.
General Advice Warning: The advice has been prepared without taking into account your objectives, financial situation or needs. You should therefore consider the appropriateness of the advice, in light of these objectives, financial situation or needs, before following the advice. We recommend that you speak to your accountant and financial adviser to help you determine whether direct property investment is right for you.