Housing Standards 2007/2008:
The Factors behind the High Prices of Owner-Occupied Housing in Prague

4.6 Media pressure promoting housing ownership

Demand in the housing market is influenced by a large variety of different factors. One of them is the information that participants in the market obtain from the media. There are essentially two types of information. The first is advertising, which is aimed explicitly at influencing the consumer behaviour of participants in the market in the way desired by the party that commissioned the advertising. The second type is information obtained from the media in the form of articles or reportage, the declared objective of which is provide participants in the housing market with information on market trends, inform them of experts’ opinions, identify the deeper aspects of how the market functions etc. However, even this second type of information influences the behaviour of participants in the market in various ways.

In order to assess the possible role of the media as a factor that influences the behaviour of participants in the housing market and in particular the potential effect on housing demand, a content analysis was conducted on articles dealing with the topic of housing that were published in the daily press between 2002 and 2007. The content analysis of newspaper articles in 2002-2007 revealed that the media probably do have some influence on the trend in the housing market in the Czech Republic, but given the relatively small number and the limited representativeness of the sample of articles analysed, this hypothesis cannot be tested using quantitative statistical methods. It is evident from the results of the analysis that the media tend to have more of an indirect effect on the housing market, mostly through the actual choice of topics written about in connection with housing. In the CR the opinions published in the daily press clearly favour housing ownership over rental housing. Owner-occupied housing is much more often the topic of articles, and in a direct comparison with rental housing in the absolute majority of cases it is deemed the better option. The risks associated with an eventual decrease in the prices of owner-occupied housing, with being unable to deal with the mortgage repayments and the related threat of serious financial losses for the potential flat owners are almost never discussed in the media. On the other hand, the newspapers in the analysis probably do not have a fundamental influence on the trend in residential real-estate prices. The analysis suggests that newspapers tend to provide information on current trends rather than actually shaping those trends themselves. The media may then just intensify any existing trends (for example, further ‘inflating’ an price bubble) rather than actually change them. Leaving aside the cases where an article seems more like a paid advertisement or the work of some public relations agency than it does a piece of journalism, most of the influence that the media have on actors in the housing market is the result of an unintentional effect of the media than the result of some deliberate strategy on the part of the media.