I was once enlightened with the notion that if two conflicting political parties agreed to reduce their campaign spending equally, the competition would remain just as fierce, yet the savings on both sides could be put to ‘better use’. This suggestion was made because of the competitive relationship where one campaign would ramp up in financial magnitude and the other would follow, much like a suburban Saturday morning auction.
The reason that this will never happen is due to the perceived influence the mass media has on consumer behaviour, the consumer in this context being the voting public. In the residential property market, the consumer demographic consists of owner-occupiers (the ‘emotive’ group) and investors (the ‘objective’ group).
Considering the point that investors (30 per cent of the residential property market) operate objectively based on the return on investment that their property will yield, market hype induced by the mass media should therefore really only affect the 70 per cent owner-occupier demographic, right? Unfortunately not.
Too often, current and potential investors forget to take a step back when making investment decisions. The selection of their next venture is based too heavily on an emotional attachment they may have developed through the consumption of hyped up mass media communication. This trend has been found among past clients, who can often be difficult to persuade back to the objective.
It is important to keep in mind that although the media is a useful and informative resource to obtain information regarding investment markets, their revenue stream is governed by their ability to sensationalise information in order to create maximum viewership, which in turn increases the value of their advertisements. This is the case for both print and news media.
The moral of the story? Read the magazines, watch the news, but remember to filter the garbage information. If you’ve read it in the daily paper … chances are that you’re too late!