Saturday, 2 February 2013

The Rush


All the legends of the game were quoted. Enzo, Larocca, Doc Wilson and ex Doc Yardney, Zheng, Zigomanis. Even Joye, before he became AFR's Tom Clancy. The themes were recurring and blunt, propelled by trouser tightening headlines and lustful quotes. Housing shortage; property reaching new heights; superannuation sucks (damn that asset class!); you need to provide for your retirement; the population is going bananas; and streets awash with renters offering bodily organs to live in your apartment.




The folder was prepared by "one of Australia's leading property investment companies". No mention where they sat on the modesty scale. After optimistic forecasts based on yesterday, zero attention to risk and 100% financing (using two banks), the real focus became the newspaper clippings featuring our experts. Then, the amateur psychology - indecision kills wealth building opportunities. Don't procrastinate, don't sit on your hands. Don't think this over. Just act now.

They did. And then they did their arse. It was Melbourne circa 2009 and how could you lose being a landlord when property had been on a rip for so long? The last seven years equals the next seven years, right? Come 2013, and a few years of subsidizing tenants had become onerous. Being closer to retirement than Warnie's latest hairpiece, they had to ask the question. The agent came back with an answer - 20% lower than what they paid, but lower offers should be accepted.

Ponder this in a week when the spruikers are back out in force and Terry Ryder got sand in his ladyparts because lazy journalists reported on Demographia's latest affordability survey. His beef? No alternative views offered (Tez wasn't called for a quote) in a story that gave buyers pause for thought. Tezza has long taken a dim view of spruiking, but in a year when he offers, "Why you should get busy investing in residential property in 2013" you understand why he's a little dark when Demographia's work basks in UV rays for a few hours.

If you're not clued in, that's modern media balance - one dude's press release without opposing views, then the other guy's press release without opposing views. The T-man can huff and puff all he likes, the dissenting voices when "property is going to the moon," are always absent. And we'll ignore who writes the script even when the data is negative. In Tasmania, the REIT gets to interpret the data for the local media, by dismissing it when it's bad and bathing in it when it's good.

No doubt Terry's got our best interests at heart, but his virtuous soapbox looks a little rickety when you start pulling out the arguments for examination and not just reaction... 
In some cases, it’s criminally negligent. Elderly people have lost their retirement savings because media misinformation led them towards disastrous investment decisions.

This is why the erosion of journalistic standards in the reporting of real estate is so serious. The financial commitment involved in a real estate purchase is huge, and consumers need good information to make sensible decisions.
In my perfect world, there would be a commission of inquiry and the people who wrote this garbage would be charged. Journalists have an obligation to the public to present information that is fair, accurate and balanced. Failure to do so should be a criminal offence.
Fists shaking in agreement, until I noticed some of Terry's one way traffic for Property Observer...

Even builders are bullish that 2013 will be a good year for property

Glenn Stevens is right – there will not be an Australian property crash, as there is no bubble

Enough with doom and gloom, or why you should feel confident about the 2013 property market

It’s time to stop procrastinating and get into the real estate market

Why you should get busy investing in residential property in 2013

And this launches no further back in time than December 2012. Fair? Accurate? Balanced? All are a content dead zone. Some meandering fluff and all guilty of telling one side of the story. Not that I wouldn't be in the dock for similarly one-sided offences, but if that's T-man's perfect world, allocate me my soap on a rope and I'll do the time. Others faced with incarceration would argue opinion is opinion - or expert opinion.

In a property spruiker's marketing folder there's little difference.Whether the T-man likes it or not, some slippery eel out there has probably already printed those 2013 bullish predictions and appropriated them for whatever he's selling - property is back, don't think, just buy.

Sure, Terry's got a business to run and he can't giveaway all his good analysis for free, but some of his free stuff - the stuff he uses to raise his profile - is the exact "don't wait, act now" garbage he laments others produce. The same stable floor muck that halts reasoned reflection in the naive.

The real knee slapper? And the moment you start wondering if Crikey read his thunderings before giving them a reprint? The call for an inquiry and criminal charges for non compliance - for who? Yeah, the other guys. Ignoring the dire need for regulation in his own industry while shifting the focus to the someone else's. They need to have an inquiry. They need to be charged. Oh yeah, amazingly ballsy stuff. People are doing their arse in property, but the regulatory focus should be on the media? Crikey fell for it and it sounds like Jonathon Holmes over at Media Watch will be co-opted into preaching from the same playbook.

Real estate journalism has always been an area of ill-repute and while I'm always happy to crossbow them, they're only the lazy messenger for a cowboy industry with minimal regulation. AFSL? Huh. ACL? Maybe. Statement of advice, reasonable basis for that advice, a risk profile even? Nope, here's a folder with scant regard for your circumstances, but plenty of reasons on why you should feel positive this year and here's all the old classics on why property is a no lose deal. Remember, indecision only delays your path to riches.  Don't delay borrowing mid six figures, no matter where you are in life. Oh and here's the five figure charge for our service. This is where people really smoke their retirement.

The shame is, T-man is capable of so much better, yet he's foaming about lazy journalists. That's my job, T-man, I'm the guy blogging in his underpants (literally). You're the guy wearing the suit. Go speak to power about the right industry. The cleaner property is, the cleaner it gets reported.

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