There are some really important things to remember from 2022. Inflation was a dirty word that affected us all. The knock-on impact of inflation was interest rate rises that changed the real estate landscape from boom to gloom. The media hype on bargains was not as universal as the reports suggested and the pent-up frustration of the market changes led some people to lash out. To top 2022 off our privacy was invaded like never before.
2022 was not a great year for some but of course, every threat offers opportunity. The media hasn’t focused on the people that have benefited from the threats but of course, they exist. Some businesses profit from rising inflation if there is little supply and high demand. Deposit holders saw a higher yield because of inflation and that was a welcome change. Properties that did sell during this period for less allowed new purchasers to entre the market. Bad behaviour has been called out and fewer people are willing to tolerate abuse agitating for change silently. The privacy we ‘enjoyed’ has been invaded and it’s now in governments’ interest to vastly improve data collection. So, what should we remember?
Inflation is a rise in prices, which can be translated as the decline of purchasing power over time. The rate at which purchasing power drops can be reflected in the average price increase of a basket of selected goods and services over some period of time. When we hear about inflation and its effect on real estate it is important to remember that consumers with large mortgages – often first-time buyers in their 20s and 30s and suburbs far from CBDs – will be disproportionately affected by rising interest rates.
Changes in interest rates
An interest rate indicates how high the cost of borrowing or the rewards is for saving. So, if you’re a borrower, the interest rate is the amount you are charged for borrowing money, shown as a percentage of the total amount of the loan. So we need to remember interest rates rise when inflation rises because lenders demand higher interest rates to compensate for the decrease in purchasing power of the money they are paid in the future.
The media needs headlines
Media uses manipulation tactics that planting that often include and/or amplify misinformation and disinformation using humans or digital tools. In real estate, the media exploits the bad behaviour of a few and suggests it’s a norm. Mass media also hypes up what people want to hear regardless of whether it is universally true or not. The 2022 takeaway is that mass media real estate reporting makes money from public interest not necessarily from facts.
Frustrated people lash out
Covid 19 left people isolated and frustrated and this pressure cooker was exploding on service providers. A year post Covid, we face new hindrances – inflation and rising interest rates. For many less favourable results at auction, rising costs have led people to feel vindicated letting off steam on mostly female real estate agents. Bullying and intimidation were a legacy of 2022 and one we want to expose and stop.
Privacy is not so private
We all covet our privacy and value measures taken to protect the public. However, 2022 was the year it all got too big to protect and left many people dangerously exposed. In real estate, the best thing to remember from 2022 regarding privacy is to learn the ways to identify scams and phishing
Well, that’s a wrap for us at EWRE. We wish you and yours a wonderful Holiday Season and a fabulous 2023 and all that will bring.