Listening To The Real Property Experts - August 2021
By Guest Blogger, Terry Ryder, founder,
hotspotting.com.au and propertyU
Probably the most mis-used word in Australian media coverage of real estate is “expert”.
Journalists seek to give credibility to the content of their articles by claiming in the headline or introduction that the views that follow are from “experts”.
Sadly, in most cases, the individuals presented are not experts at all. They may have areas of expertise, but this does not include residential real estate.
Too often media seeks commentary and analysis on the housing market from people who are not specialists in this field.
They go to economists from major institutions, university academics and media personalities who have attitude but not expertise.
Possibly it’s because these are often people who are willing to say something stridently negative about real estate, which suits the purpose of many journalists.
Shane Oliver from AMP Capital fancies himself a real estate expert. He’s the go-to guy for many journalists seeking a quick grab about property markets. But his track record on forecasting real estate outcomes is particularly poor. Real estate is simply not his area of authority.
Alan Kohler is a very experienced and high-profile financial journalist and television commentator. He has undoubted credentials in analysing business and share-market matters but when he strays into real estate, he starts to look foolish.
James Kirby is a media commentator and columnist with some qualifications on the economy and business issues, but his loud opinions on residential property are generally more about attitude than substance.
As an aside, here’s a clue to help you identify a charlatan: if they attribute events in the real estate market to “record low interest rates”, they’re a pretender.
One frequent source of misinformation on real estate is the comparison website finder.com.au, which regularly polls its panel of “experts” to drum up some publicity, usually around the time of the RBA monthly board meetings. There are 40 or so individuals on the panel of so-called experts but only a handful are real estate professionals.
Rich Harvey of propertybuyer is one of the few genuine property experts on that panel.
Most of this gaggle of opinion-givers are people who, around April-May last year, were forecasting a collapse in property markets and a severe decline in prices.
Only the genuine real estate specialists correctly forecast that real estate would defy the impacts of the pandemic – with some correctly predicting that the pandemic would unleash forces that would drive prices significantly higher.
Curiously, there are plenty of these well-credentialled, credible property specialist’s media could go to. But journalists tend to dismiss anyone with a positive outlook on real estate as a spruiker or someone with a vested interest in talking up the market.
It means that Australians need to be careful who they listen to and, more particularly, who they believe.
There are many thousands of wannabe investors who believed the dire forecasts of the non-experts 12 or 15 months ago and scrapped plans to buy property. Now they’re trying to get into the market but having to pay 15-20% more for homes.
If they’d listened to Louis Christopher from SQM Research, or Rich Harvey or indeed myself, they would have perhaps made different choices and benefited financially.
A recent survey of the Finder panel of mostly non-experts found that the majority of them believed that pandemic impacts would slow property growth. Apparently, they haven’t learnt anything from the past year or so.
Genuine property experts who understand the forces driving this boom know that prices are rising because of the pandemic, not despite the pandemic.
The people who consumers should heed are those for whom residential property is their full time occupation: specialist researchers, buyers’ agents, valuers – people who live and breathe real estate markets every day and understand what makes them tick.
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