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Home > Polish Property Blog > Reality and Perception: Thank the Press
Reality and Perception: Thank the Press
March 2008
"Potential purchasers flee the market and professional investors move in with glee to snap up bargains." |
Professional property investors love hype, especially from the press. Used well it can generate exceptional profits because it causes swings in the market far in excess of reality. Last year newspapers were full of reports about how property prices were rising and soon buyers in Britain would have to borrow ten times their salaries to buy. Estate agents described the frenzy from purchasers as "clubbing seals". Sealed bids and contract races were common place and many developers cashed in properties at the top end of the cycle. This year it is all about price drops and the stories in print now are how values will decrease by ten or twenty percent. Potential purchasers flee the market and professional investors move in with glee to snap up bargains. Prices move up and down on a regular basis in every country including Poland. When the news is all about price rises the press turns a blind eye to the drops and vice versa. The result is that naturally swings in the market are exagerrated by the media and the response from buyers following the advice of journalists pushes this to even stronger extremes, in both directions. The underlying reality is that prices rise but, thanks to the press, the perception of mainstream buyers provides fertile ground for professional property investors |
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