Humanomics!

At the beginning of this article, I said economics doesn’t act independently of human beings. I guess the one thing we don’t know for sure is who all those human beings are who can have an impact on national and international economics, and exactly what their interests are. Even the most astute analysts, who question the motives behind local indices like the CPI or bodies like the RBA often don’t question the larger entities like the International Monetary Fund.

But there are things we small-fry can do, as apparently our confidence and emotions like panic have a lot to do with it. Having a course of action always helps increase the former and decrease the latter.

Here is my advice for those with an eye to property:

• Watch the broader market – at the moment, thanks to factors beyond local control, it is being regulated via interest rates. Don’t be fooled. Interest rates are going down, but wages and household debt are increasing. Do your sums based on real data.
• Distrust messages based on sentiment. There are plenty of entities out there steeped in the property market that will give you good reports about market sentiment. Real data is all that matters. Yes, sentiment is often discounted when people look at “hard” economics, but when it is reported, it’s easy to intentionally misrepresent it.
• Exercise up-to-the-minute vigilance about the property market. Take note of live, current data and read it correctly. If you see an expensive home sell, look at how quickly it sells after it’s been listed. Are they selling above reserve? Have you noticed an increase in bidders for expensive properties that might not have been evident a couple of months ago? These are all signs that an upturn might be in store. But never make assumptions. We can never discount the dreaded “bounce” as a factor.
• Listen to the Jeremiahs, the pariahs, who reveal “negative” economic data. The so-called “counter-narratives” of people like John Adams, Edwin Almeida, and Martin North, or Max Keiser in the USA, are most likely the real narrative. They’re not here to discourage you, but to empower you. Even if you disagree with their opinions, at least they “bang the other gong”, which is better than the homogenous noise you hear in mainstream media!
• Understand your area. Pick the brains of reputable local agents. They are a good source of local information.  

Of course, all the information above is open to revision, and I’m open to feedback. Things are volatile at the moment, and the scenario changes from one day to the next. Let’s keep watch together!