20 Nov Forget Fake News – the Real Danger is Fake Market Research
Ah, the Internet. Don’t you just love it? Full to overflowing with so, so much information! And plenty of it is dedicated to property.
It’s information overload, and all anyone needs to add to it is a computer and a connection. That’s right, you don’t need qualifications or actual knowledge – anyone can write anything about anything and put it up on the internet as ‘research’. Isn’t freedom of speech wonderful?!
Beware though – and this is stating the obvious – much of information is questionable quality. Digest what you read with a grain of salt, or suffer the consequences of monetary heartburn.
Managing Director of Propertyology, a property market research and buyer’s agency firm, Simon Pressley, says that there’s a significant risk from people confusing ‘reading’ with ‘research’.
“If the reader doesn’t have sufficient background knowledge on the topic that they are reading about they won’t have the ability to interpret good information from bad or well-informed opinions from gross generalisations,” Pressley says.
“Let’s say I had a pain in the stomach and chose to turn to the internet to work out what it was. Search engines would produce all sorts of material which would produce possibilities ranging from an ulcer, to indigestion, or bowl cancer. The thing is, I don’t have a medical background to be able to interpret the information. Instead of self-diagnosing on Doctor Google, I’d be wise to go to a qualified medical specialist whose primary objective is my best interests – my health.”
With media companies continually making cutbacks to stay afloat in this digital age, journalists are under increasing pressure to reach daily ‘click-count’ quotas through producing higher content volumes; quality becomes a secondary consideration.
Pressley says that much of what gets published on the internet about property markets is backward-looking, is heavily focused on only a few Australian cities, and can be influenced by vested interests.
“There’s a lot of mass-produced generalisations which fill people’s devices these days. In some ways, it’s suppressing people’s intelligence. People consume content, they fail to ask themselves ‘why’ others have a specific point of view, and just adopt the consensus as gospel.”
Pressley references the abundance of property news stories in 2014 and 2015 with every Tom, Dick and Sally claiming that Brisbane was destined to be Australia’s next booming property market. He says that there was very little substance to support those big predictions and history now shows that Brisbane’s market was incredibly underwhelming.
“While all roads on the internet where pointing the DIY to Brisbane, we were thoroughly analysing the fundamentals of locations all over Australia. The metrics which we rely on were suggesting that the road ahead for Brisbane was uninspiring while other locations like Hobart and parts of regional Australia were destined for good times,” said Pressley.
“The information which shaped those decisions comes from years of analysis and dozens of different sources; it isn’t found in one nice neat little package on Google somewhere.”
Much of the content found on the internet about property markets refers to what a market has already done. According to Pressley, people looking to buy today ought to be more focused on what a market is likely to do over the next few years.
“The problem with making decisions about the future of property markets based on historical property data, is that it’s like looking out of the rear-view mirror to see where you’re going. At Propertyology, we look ahead. The most significant leading indicators for that are often found through understanding employment trends, supply pipelines, and economic analysis.”
Investors would be wise to exercise caution about news articles talking up perceived ‘hotspots’ that are (allegedly) ripe for a quick burst of capital growth. It’s not uncommon for those quoted in the story to have a vested interest to promote a particular suburb because they have a business there or they have a real estate project up for sale.
On the other hand, at any given time there may be dozens of locations across Australia which do have the right combination of market fundamentals to support a really solid outlook. You’re unlikely to read about these locations in an online news story because they are outside of capital cities.
Pressley says that parts of regional Australia, home to more than 8 million people, contain some wonderful gems for property investors.
“We analyse property markets every day. We do feel that there is a science to it, although it will never be an exact science. We’ve invested significantly in conducting formal studies to acquire very valuable learnings from Australia’s property market history. The methodology which we adopt to help people invest is heavily shaped by these learnings from the enormous body of research behind us,” he says.
“We conduct objective and qualified analyses of every property market in Australia. Then we act for as a buyer’s agency to find that right property in those markets, and negotiate the lowest price for our clients.”
It’s an ethos that’s certainly working for the company and its clients.
Propertyology is a national property market researcher and buyer’s agency. The multi-award-winning firm’s success includes being a finalist in the 2017 Telstra Business Awards and 2016 winner of Small Residential Agency of the Year in REIQ Awards For Excellence. Managing Director Simon Pressley is a REIA Hall Of Fame Inductee and a three-time winner of the REIA and REIQ Buyers Agent of the Year award.