Would an alien invasion knock Johannesburg house prices?

What would we do without the Internet? “Three hours more work each day” is an immediate tongue-in-cheek answer. Because as much as we welcome the time-saving the Internet brings, we must acknowledge its ability to draw us away from our appointed tasks in

A deluge of prose sucked into Cyberspace

Each press release is sucked into Cyberspace – and wrestled with by dozens of journalist hacks – before resurfacing in a dizzying array of modified forms across hundreds of websites. That’s where the information overload comes in. Three decades ago you’d only stumble across a story once. Today you’ll see different version of the same article on as many information websites as you care to visit. Go ahead – type the words “FNB Residential Property barometer” into your favourite search engine and scan the list it returns. We used Google which fetched 1 050 links to websites as diverse as fnb.co.za and homecomingrevolution.co.za.

The sheer volume of space dedicated to the same story is not the only concern. The frequency of articles on similar topics is driving readers mad. We turn to a fascinating comment from a Fin24 reader to illustrate:

House prices to rise…

House prices to fall...

House prices to remain strong…

House prices to plummet…

This just goes to show how much BS is peddled by the so-called analysts.

It’s an expected response from a reader continually bombarded with different takes on the same topic.

To make matters worse, each player in the world of online communication wants to get the edge on the competition. The media company releasing the data is under pressure to put a spin on the press release to ensure that more websites carry the story – hence FNB’s “demand up mildly and emigration selling may be subsiding” sub-head. And online editors are always looking for an angle that similar websites miss – did anyone else use aliens in their tag line? Before you know it the original statistics are hardly recognisable.

Oh shucks! This is supposed to be a property article

Now that we’ve had a bit of fun, let’s get the low down from the FNB Residential Property Barometer for Q4 2008. The bank’s index has shown a minor improvement, moving to 4.6 points from the 4.1 recorded in Q3. But FNB reminds us that these positive developments must be viewed in light of the “global economic crisis [that] keeps the 2009 outlook uncertain.”

FNB Home loans strategist John Loos says the index’s ‘headline trends’ improved in the last three months of 2008. These included non-seasonal items like the time property remained on the market, the selling price of properties, first-time entrants to the market and the buy-to-let market. Loos reports that the average ‘time on market’ for a residential property has dropped from more than 20 weeks to 15 weeks and three days. Although the number of sellers that had to lower their asking prices decreased somewhat, the 81% remains fairly high. The number of first time buyers (as a percentage of total home purchasers in the period) is also up, from 12% to 17%. The big news – according to FNB – is that estate agents reported a decline in the number of sellers wanting to emigrate... The bank concludes that a “downward trend in emigration selling would not only provide support for the property market but for the economy as a whole.” Loos goes on to say that overall “the FNB Residential Property Barometer shows early signs of property demand strengthening.”

One of our concerns is that the massive decline in property transactions in recent months is distorting house price statistics. And Loos seems to agree that it’s too soon to get excited. FNB “doesn’t expect any fireworks, as the big negative factor (that will work against the positive impact of lower interest rates) for residential property in 2009 will be the weak global economy and its negative impact on economic growth...” You’re going to have to wait till 2010 for national house prices to move higher.

Editor’s thoughts:
Although everyone’s entitled to their view it’s difficult to digest totally different views on statistics that should be cast in stone… We can tolerate a different take from economists and estate agents for example; but economists from two different banking groups should come to similar conclusions... Do you get frustrated when you read conflicting articles on the same topic? Add your comments below, or send them to gareth@fanews.co.za