Hi again everyone.  I read a very interesting article recently that suggested there was a strong correlation between the number of property and DIY programs on TV and the state of the property market in Australia.  Have a read yourself (a summarised version) and make your own conclusions.  Let me know what you think.

Several economists have the belief that televised Property shows played a large role in the 2001 to 2003 Australian property boom.  Every channel had some sort of “be a Property Owner Show” back then.  As the property market declined the number of these shows on television also dropped.

However, lately we have seen a resurgence of the lifestyle and DIY reality programs flooding television in Australia.  Some of the notable entrants are “The Block” (nine network), “The Renovators” (ten network) and “Top Design” (nine network) adding to the genre stables of “Better homes and gardens” and “Hot Property”.  Even the ABC is not being left out with continuous reruns of “Grand Designs” and the long running “Gardening Australia”.  The consistent theme to these shows are similar: “If you don’t own property you’re not a normal Australian”.  If you channel surf you can find a property show at any time, especially if you have Fox/Austar.

While the shows are primarily produced for entertainment value and many would argue that the renovation/design profits purported by such shows are widely exaggerated, the impact of these programs can be hugely beneficial to consumer confidence.  Lack of consumer confidence has been the main factor in the weak Australian property market as Australia does not have the same fundamental problems that some overseas markets experienced.  The American and UK “crashes” were primarily caused by under regulated banking policies, and in the US a huge oversupply of new properties.

It will be interesting if history remembers a property boom of 2011 long after all these shows are forgotten.

(from: Accredited Broker)

I definitely agree that consumer confidence is the main factor.  It only takes a small increase in “confident” buyers to change the market fundamentals – and a swing from “buyers’ market” to “seller’ market” may not be that far away.  I also read with interest that Westpac’s chief economist, Bill Evans is now forecasting a series of interest rate cuts. He said that low consumer sentiment could force the RBA to slash the official cash rate by up to 1.0% in 2012.   Let’s hope he has got it right!

Cheers for now from “your trusted finance professional”,

Tony Cottam  JP; SA Fin; Dip FS

TV Could Promote Property Boom is a post from: South Coast Business & Financial Solutions Pty Ltd

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