Set to soar

HOLIDAY HOME SALES SET TO SOAR blares the headline
on the front page of today’s Sunday Star-Times, followed
by the breathless intro:

2010 could be the year to buy your own slice
of paradise, say property experts, as buyer
confidence returns to the holiday home
market and sellers set reasonable prices.

First, let’s look at the truthfulness of these statements.
Nowhere in a long report by Emma Page is evidence
produced to justify the headline; in fact, the only ‘expert’
quoted says it’s unlikely that there will be a surge in
buyers as there was in the boom years. Elsewhere we’re
told of an ‘uplift of interest,’ a ‘flurry of activity,’ ‘some
life’ returning to the market, but nothing remotely
indicating that the market is ‘set to soar.’

Then there are the ‘property experts: who are these guys?
Only two people are quoted, and one is the chief executive
of Harcourts, a real-estate company with a vested interest
in talking up sales prospects. The other is someone from
an outfit called Strategic Risk Analysis who could
reasonably be called an expert, but all his projections are,
rightly, hedged with caution (it’s him who says a surge is
unlikely). Further information purporting to be evidence
in support of the ‘set to soar’ thesis turns out to be the fact
that the ‘most popular search on Realestate.co.nz for
2009 was “mortgagee”, suggesting people were looking
for bargains'; and the conclusion of Trade Me head
Brendon Skipper—who kindly ‘analysed six top holiday
areas for the Sunday Star-Times,’ that while demand had
risen nearly everywhere the volume of listings is mostly
down—which means, of course, that owners are holding
off selling, though the report doesn’t make that connection,
obviously because it would wreck the ‘set to soar’ thesis.

Which brings us to: why? Why would the country’s biggest-
selling newspaper lead with such a blatant beat-up? It’s
not the first time, either: the Star-Times under editor
Mitchell Murphy has a fondness, not to say obsession, with
front-page leads about the property market. More than one
in four of the paper’s front-page leads during 2009 was
about real estate in one form or another, either promoting
investment (NOW’S A GOOD TIME TO BUY A HOME) or
scaremongering (YOUR HOME’S WORTH LESS THAN YOU
THINK). Actually, they liked one headline so much they ran
it twice: MORTGAGEE SALES HIT FRESH HIGH (30 August)
and MORTGAGEE SALES HIT NEW HIGH (22 November).
The aim of these latter stories, by the way, was clearly to
encourage people to take advantage of the cheap home-
buying opportunities generated by others' misfortune.
Shockingly, the Sunday Star-Times did not devote a single
front-page lead to the biggest local story and worst tragedy
of the year, the Samoan tsunami of 30 September.

In short, the Sunday Star-Times has made it its business to
make property-buying a desirable and even necessary
thing, notwithstanding the economic recession and despite
the advice of people with far more claim to be 'experts' that
the last thing New Zealand needs is another property boom,
which would in fact be destructive to the country's future
prosperity, not least because all the money that goes into
bricks and mortar is money that doesn't go into savings,
research and productive forms of investment. Why the
paper feels it needs to do this, I don't know. It obviously
can't have anything to do with wanting to ensure that house
sellers and real-estate firms keep advertising in the Star-
Times and other papers in the Fairfax stable, and it's
equally hard to believe that Mitchell Murphy wants to
damage the New Zealand economy by encouraging short-
term acquisitiveness at the expense of long-term benefits
for the whole population, whether homeowners or not. So
what can it be?