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June 19, 2018

The media is in a whirl, frantically gushing out the latest news on house prices. Excitement is afoot as it tells us that the property bust is nigh. Frankly, I am so over the media making predictions and sporting them as facts. The only verified fact is that they get it wrong all the time!


So why should this time be any different? Who knows but we do live in interesting times with a cocktail of events taking shape. Let's start with the banks receiving a Royal flogging ( ... ah transperancy, don't you love it! ). As a result, these fine upstanding institutions are now cowering, tripping over themselves to 'do the right thing', over reacting to lending criteria and making its applicants jump wildly spinning hoops. I mean...is it not a gross invasion of privacy to ask if you have a gym membership and how many lattes you buy a week when composing your financial statement of position? Next thing they'll be probing into is the quality of tampons you purchase and asking you to cut back on condoms! Methinks a certain kind of insanity is seeping into the system that will poison and darken our already precarious economy.


Why not apply common sense? Is a gym membership going to be a deal breaker? The banks are proving to have no intenstinal fortitude. They thought they were the untouchables but the rude shock has sent reverberations way down the line to the ordinary house buyer hoping to find some stability on shifting sands.


Another factor in this cocktail of events is the slowing down of foreign borrowers and the impact that this is having on our housing...'hooray' I hear first home buyers shout.  The media has wrapped all these elements up with one big bow to blatantly state that house prices across the nation are going south and rapidly. So for the first quarter in six years prices are dropping. Is this cause for alarm? Is this a shift of cataclismic proprotions? I think not. Let's have a look at the changes around our fine nation. As shown on the chart, the greatest drop is in Sydney -1.2% and some states have increased. To a first home buyer, this is hardly going to make a difference. Finance is much harder to come by and prices are still high. My question is, why is the media hyperventatling? It would do well to report on the facts instead of attempting to wield influence over a market that has endured too much speculation at the expense of ordinary Australians who aspire to home ownership. Let's not get carried away with headlines like:

House price debate goes from if they'll fall to by how much
By business reporter Michael Janda


This sort of provocative language will only serve to perpetuate a pastiche of speculation, fear and reactive behaviour on all sides. In the end, if they succeed in convincing the market that it is in freefall the ones who will truly benefit are those waiting on the sidelines, particularly the investors, waiting to bounce...and the cycle begins again.