COMMENTS ON ARTICLE BY TERRY RYDER
IN THE WEEKEND AUSTRALIAN 9.07.11
In Terry Ryder’s article he shares some of the abusive mail he receives and works his way around to his concerns about “the level of misinformation about property”.
In this we are in complete agreement.
He goes on to say “In my 30 years as a researcher and writer on Australian real estate I’ve never seen a time with so many myths and misconceptions masquerading as research and analysis”.
The points he outlines next we are in total agreement about;
“We don’t have a price bubble.
Our property values will not collapse.
We don’t have a chronic housing shortage crisis.
The great Australian dream is far from dead.
Negative gearing is not causing price inflation.
The inner city suburbs do not provide superior growth.”
I have some thoughts of my own as to where some of the myths originate.
For example take the idiot who recently went into print claiming that Australian house prices were 40% overvalued and using the U.S.A as his basis for the claim.
He seems to be unaware that many mortgages in the U.S.A. allow owners to simply return the keys to their lending institution and walk away with no more commitment. At one stage so many owners were posting their keys back to the bank, it gave rise to the term “jingle mail”.
He also ignored the fact that we have a highly regulated banking system.
When Mr Ryder and I were younger we used to have forecasters, but back then they had to at least show you their crystal ball and call themselves Madam Zara or some such so at least you had some idea they were simply showmen.
My suggestion to save you from falling for these forecasters is this. Ask them to show you where they forecast the GFC, the political assassination of our previous Prime Minister, the hung parliament or even the carbon tax.
Then weigh up the value of their foretelling of the future.
As most of the soothsayers are economists who are never held accountable (only a year ago they forecast 4 interest rate rises of which we have had one) it pays to remember the old definition of an economist as someone who has forecast 28 of the last 3 recessions.
Owner / Director
Noble Real Estate