Well, that was quick, wasn’t it? Almost before it got started, the real estate recovery is over. Dead. Finito. No more recovery.
It echoes the mining boom. That’s finished, too. The $300 million in resources developments underway are a figment of someone’s imagination.
Just as the rise in lending for home purchases, with first-home buyer loans up 18% on last year, must be a mirage. The significant rises in residential rents in multiple locations I read about must have been a misprint. The improvement in clearance rates was clearly a dream and the gradual improvement in city prices from other sources a fabrication.
None of that counts because one month’s figures from one careless research source found a small decline. On that flimsy basis, media organisations around the nation declared the market recovery over. Not a hiccup or a blip, but dead and buried.
AAP declared that the market had dropped because the impact of interest rate cuts had ended. This was roughly four weeks after the October reduction by the Reserve Bank and two to three weeks after the response of most lenders. I’m sure RBA board members would fascinated to learn that the impact of its rates decisions lasts only a matter of days.
There were many similar stories. The journalists who wrote those articles and keyed in those headlines should be ashamed, but I’m sure they’re not. It would require a concern for accuracy, fairness and balance – a basic sense of professional decency – to have any remorse over a presentation of news that made a mockery of analysis and added to the great overwhelming pile of misinformation that’s afflicting real estate consumers.
Why happens if the next month’s figures come out and show a small rise in property prices? What stunningly inappropriate headlines will accompany that news? “Market in miracle rebound”? “Skyrocketing prices defy downturn”? “Economists warn of price bubble”? “US analyst predicts price crash”? “Sub-editor’s brain explodes trying to dream up new superlative”?
Anyone who’s been around real estate longer than five minutes knows sales data is never smooth or consistent. It’s common to access data from four different sources about one location and get four conflicting answers.
One month’s data from one source is meaningless.
To place such a categorical conclusion on a single month’s figures from just one source – particularly a source that’s so desperate to get into print that it’s become careless – is irresponsible.
It’s the reason newspapers are dying a long, slow, agonising death. Low standards, inexpert writers, cheap sensationalism.
Sadly, some of the new forms of media present as little better.
What’s really happening in capital city markets? Nothing much has changed – there is a gradual, almost grudging, recovery underway in most cities, an event supported by most of the data coming in from multiple sources.
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The markets in Perth and Darwin are rising strongly and investors thinking of buying need to get busy. Sydney and Brisbane are also trending in the right direction. Adelaide, Canberra and Melbourne are still patchy, with conflicting data from various research sources.
The general trend is a return to growth, though moderate in most cases, notwithstanding one dodgy set of figures.
This article first appeared on Property Observer.