Here is historical house price growth. Or to put it another way, here is how much money people made, how much money the speculators made, how much money people think they made even though they won’t actually sell but suddenly feel worse off. The really important part is the scale on the left. It’s in hundreds or thousands of %
Now look at the graph the BBC used today.
The scale covers 20%. Just 20%. But they write it on a scale that makes it look to be a complete catastrophe. Given that most people don’t buy a house and sell it 12 months later this means little. There really will be people whose house 12 months ago whose house was valued at say £200K and yet now it’s worth 180K. They have no intention of selling but they’ll be wringing their hands while crying about their financial loss. But for the BBC to present such a graph which was created by 2 companies who have probably benefited from all the Govt banking handouts it means the BBC are failing to see what is essentially business propaganda. Those companies are not doing this to reassure people, they are not doing it to illustrate a wider problem (indeed doing this can create or worsen a problem), they are doing it for their selfish reasons and the BBC journo who wrote that didn’t see it for what it was.
Apply this to every single graph you have ever seen in a newspaper. I work with physicists and watching them pick apart a graph is very enlightening.
The housing market is annoying me as I have friends who haven’t a bean about this type of thing freaking out while my girlfriend (a fully qualified financial advisor) and her father (who has been the same for close on 30 years now) are unperturbed, I may go with the experts and not the pseudo-experts in the media.
Agreed. Twisting of information like this is really annoying because the creators know they are doing it and people react in the way they are intended. Always look at the scales… at least.