negative press

A number of property bulls have raised concerns about cut and pasting negative property articles.
Its quite obvious the more negative press the greater the chances of property falling and they are trying to defend their positions.

There was no complaints about positive press over the last 5 years, read any paper or magazine or remember the bounty of tv shows like auction squad etc all pushing property.

Negative press will help the property market correct but its not the main item, prices are.

The problem for the bulls is the more property begins to fall the more negative press we can expect and then we will get a snowball effect.

The article below is classic-



Link: http://www.nzherald.co.nz/section/3/story....jectid=10510759


QUOTE
BNZ chief economist Tony Alexander is defending the media against real estate industry accusations that it is to blame for the housing market slump.

Last week Alistair Helm, chief executive of realestate.co.nz, the website owned by the major agencies, said negative stories were driving down house prices.

But Alexander says if there's any blame to be attributed to the media, it would be "less than 5 per cent" of what is actually causing the market to correct.

Instead, he says the Reserve Bank has been explicitly trying to force a housing market correction for more than four years by raising interest rates.

Peter Thompson, director of Barfoot & Thompson, says the media have played a big role in the property downturn.

"The more you read in the news the more you believe it," he says. "We were hearing economists saying prices were going to fall anywhere between 10 and 30 per cent when, in reality, our figures and the Real Estate Institute's showed prices were holding their own."

However Alexander says the media didn't really "pick up aggressively" on the weakness in the housing market "until earlier this year when we saw the strong annual decline, and yet we could start to see the increase in the number of listings from the middle of last year".

Barfoot & Thompson's Auckland figures show new listings started increasing strongly in the June quarter of last year, when fixed mortgage rates reached 8.5 per cent and kept rising. "That's when we saw retail spending growth stop and vendors begin flooding the market with properties, as debt servicing costs are too high," Alexander says.

Real estate agents say buyers have been scared by the media, but Alexander says they started backing away in the June quarter last year because they were finding interest rates too high.

Alexander says he can understand why real estate agents are looking for someone to blame: "Not all of them want people to be highly informed about the true state of the market."

The challenge for real estate agents, he says, is to make vendors realise there is an oversupply of properties on the market, and so "negative commentary" is useful for convincing vendors to cut their price.

Vendors are already taking properties off the market, realising if they leave them sitting there unsold they become "tainted" properties - and buyers will only throw "extremely insulting" offers at them.