Why does ‘fear makes good headlines’ in property investment

Property bubbles, according to Smart Property Investment’s Phil Tarrant, are easy headlines because many investors are constantly anxious about the state of the market—and understandably so. After all, real estate is not a cheap investment nor is it a particularly risk-free one.

SPI content producer Sasha Karen said: “They put so much money and time and effort in to [these investments], so of course, they're going to be worrying and panicking about the slightest little movement that could send that whole thing tumbling down.”

Even international news sites report that Sydney’s property bubble is about to burst as price growth hits a low percentage. However, Phil believes that smart investors know better than to listen to these “doom and gloom” headlines because Australia has markets within markets and there will always be an opportunity to succeed somewhere.

For instance, while there are investors in West Australia that are hurting and while investors in Perth are struggling due to the absence of rapid price increase, Sydney and Melbourne continue to provide good growth to property investors. In fact, Sydney had continued seeing a great run of price growth in the past five to six years.

According to real estate editor Tim Neary: “Some [markets] are doing okay and some of them are not doing okay—does that constitute a property bubble? I don't know [but] my personal view is no.”

“But [if] you talk to 10 people, you'll get 10 different options,” he added.

Moreover, banks hold a great share of debt with property investors who have a mortgage on their property, making them a big co-investor in real estate.

Phil said: “Banks aren't going to be lending money out if they think that they're lending at a rate which is way above what those properties should be.”

Property investment, at the end of the day, has a “structural integrity” that many asset classes don’t hold as of the moment.

According to Tim: “We're seeing in the markets that are performing well and have performed well that there are fundamentals that are backing up those reasons [why] the market has performed well.”

“Where there's that structural integrity in the market, there's less likely to be a burst. It's less likely [that] it's just going to fall over like a pack of cards,” he added.

The responsibility of journalists

While journalism is about talking to the audience and discussing topics that they are interested in, writing stories must be done with diligence and sensibility, according to Phil. Fear is understandably one of the more popular points of discussion in property investment because of how unpredictable and ever-changing a venture it is.

Property investors would naturally want to know where their journey might lead in the future considering the time, effort, and money that they have invested in the venture. However, as hard as it is to discuss, there’s one simple secret to good reporting.

Tim said: “Sasha does this very well when he writes these stories—he gets to the heart of matters. He'll ask the experts about ‘This is what people are talking about. What's the truth?’ ”

Every journalist must aim to use their profession to help, no matter which field they serve.

Sasha said: “Property is something that people want to know a lot about but it can be so intricate, there are all of these little things that you need to know."

“If I can help somebody make the right decision rather than a poor decision ... that's my pat on the back,” he concluded.

 Tune in to The Smart Property Investment’s Show special two-part "Top 10 SPI articles of 2017" episode to know more about foreign investment, crowdfunding, the threat of the bursting bubble, and the many reasons why you should invest in property.

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