Misinformation is the greatest issue facing real estate investors

ABC television channel News 24 took about two minutes to encapsulate why misinformation is the greatest issue facing real estate investors.

Presenters Michael Rowland and Virginia Trioli and guest James Kirby managed to articulate every major myth in residential property in roughly 100 seconds of information mayhem last Friday.

Never in the history of human conflab has so much twaddle been dispensed to so many, by so few, in such a short space of time.

First we had Eureka Report’s Kirby, who may be informed on business affairs but is clearly not a real estate expert, making quite sweeping statements about “the property market” based on one set of numbers from a single source.

He made the mistake everyone in media is making – he extrapolated the situation in Sydney and, to a lesser extent, Melbourne to the whole country. (If Sydney’s having a boom then the whole nation is, apparently.)

TV presenters simply should not comment on important issues about which they know little or nothing. This clearly includes real estate.

Kirby also compared alleged price growth in the two big cities with current economic growth and inferred that this was out of balance, ignoring the reality that this is Sydney’s first growth year in a decade and that over the past 10 years Sydney price growth has averaged less than wages growth and not much more than the inflation rate (according to multiple sources, not the one source that misinformed Kirby’s generalised comments).

Kirby probably doesn’t realise he made a twit of himself because real estate is not his field of expertise. I get the feeling he had a quick scan of someone’s press release before going on the show to add his two bob’s worth to the great mass of misinformation that afflicts property markets nationwide.

Then the two ABC presenters weighed in.

Rowland spoke about “the blistering pace of housing prices right around Australia”. Given that six of the eight capital cities have recorded house price growth of less than 5% in the past 12 months, not forgetting the moderate growth in many regional markets, Rowland’s statement is quite irresponsible.

He and Trioli then made other off-the-cuff remarks about the lack of affordable housing, the importance for governments to take urgent action and the need to wind back negative gearing, presumably in the belief that this somehow will make housing more affordable.

Where does this nonsense come from? Everything they appear to believe about Australian real estate is contradicted by the research evidence.

I should point out that News 24 is my favourite channel on free-to-air TV and I enjoy Rowland and Trioli as one of the best news presentation teams in media.

But they simply should not comment on important issues about which they know little or nothing. This clearly includes real estate.

If you’re going to analyse an important industry to a national audience, for pity’s sake inform yourselves first. Do some research, rather than skimming the headlines in the Sydney Morning Herald, Australia’s biggest source of real estate misinformation.

Otherwise you’re part of the cycle of misinformation that hurts Australian consumers.

Here’s how media figures like Rowland and Trioli contribute to that cycle. They read something in a newspaper, they assume it’s accurate and they repeat it as fact. Through this process of regurgitation of misinformation, lies, half-truths and propaganda become accepted as fact by consumers, who then make bad investment decisions.

This helps to explain why most Australians who buy an investment property have a bad experience and, within five years, no longer own that property.