Press Watch 2007-03-01

Property supplements inflate the market, creating demand for more property supplements

Irish newspapers are heavily dependant on the revenue generated by advertising carried in their property supplements. Indeed, since its acquisition of myhome.ie, the Irish Times can almost be described as a property advertisement company which also publishes the odd bit of news. The influence of this dependancy is most obvious in the editorial material that is published alongside the property ads. Articles about properties on the market are almost indistinguishable from the material provided in brochures by estate agents. Their purpose is not to describe the property, but to maximise advertising revenue by encouraging their readers to buy property. When properties don't have much in particular to recommend, the journalists simply try to evoke an image of an idyllic lifestyle vaguely associated with the place, and they liberally borrow the vocabulary of romantic poetry in doing so. The phrase ‘sylvan setting', which can be applied to any property within sight of a tree, appears 110 times in the archives of the Irish Times's property section and 96 times in the Independent's archives, but is never used in any other context. The Irish Times even manages to describe small two-bedroom appartments in Dublin 8 as being “steeped in heavenly light”.

Sometimes the authors get carried away with their pastoral lyricism. John O'Keefe, property editor of the Sunday Independent, recently gushed about “the sweetest damned cottage” in Donegal, “a place where comely maidens dance at the crossroads while the menfolk attend their weekly botox sessions”. Either somebody has put acid in the local water supply or he's just not taking the whole genre seriously.

Most people don't expect objective appraisals on the property pages. However, there are more subtle ways in which the dependence on property advertising revenue manifests itself. By any normal standards, Ireland is currently experiencing a property bubble. However, this does not come across in the way the newspapers cover the market. Reports and predictions published by groups with glaringly obvious vested interests are given as much prominence as those carried out by reputable international analysts. For example, on 28 January, the Sunday Independent reported that “the soft landing for Irish house prices would appear to be official” – this was based on a report carried out by the IAVI (Irish Auctioneers and Valuers Institute), Gunnes and IIB bank. Of course, auctioneers, estate agents and mortgage lenders are hardly disinterested players and it's not exactly surprising that they conclude that things are hunky dory. Nor is it surprising that newspapers, with their own vested interest, should give as much prominence to such reports as they do to the much more uncertain and risk-laden outlooks of reports produced by the OECD.

One of the negative consequences of the property bubble has been the chaotic mushrooming of an ever-expanding commuter belt around Dublin and true to form, our newspapers have been doing their best to encourage this unsustainable and environmentally-ruinous trend. The Irish Times has been running a series of features on particular locations in the commuter belt, presenting them as pastoral idyls for those seeking a “less hurried lifestyle”. The “gentle friendly flow” of Athy might sound nice, but since much of the town's expansion is driven by Dublin commuters, most of the slowness that they'll experience will be sitting in traffic, churning out greenhouse gases on the M50.

Property bubbles are often accompanied by spikes in conspicuous consumption as owners feel richer due to the unrealistic values of their properties. The current surge in consumer debt suggests that this bubble is no different. Yet this is another area where newspapers have a vested interest in encouraging the market's irrationality. Cars are the ultimate consumer status-symbol and, with their motoring supplements, newspapers also profit from that market. Indeed, the explosion of commuter towns creates what business analysts would call a “synergy” across the newspaper's core advertising sectors and it's probably no coincidence that gushingly positive pieces about SUVs sit side-by-side with the advertorials for commuter towns in the Irish Times property section.

When economic historians of the future come to analyse the Irish property bubble, one of the factors they will identify as causing the irrationality of the population in driving up prices to unsustainable levels will be the fact that the newspapers serve as a positive feedback loop. Most people depend on the press for its information about the market and as long as it tells the public that prices will continue to rise, people will continue to purchase property at elevated prices, putting themselves into unsustainable levels of debt, with the assumption that they can always sell the property for more than they bought it. However, the longer that this spiral continues, the worse the long-term impact on the country is likely to be. And newspapers will suffer economically as much as anybody from a downturn, as their lucrative advertising streams are hit on several fronts at once.