Special Investigation: The Big Spruik

I have previously spoken about my annoyance with the liberties available to the Real Estate industry because their agents are do not have to conform with the Australian Financial Services Licencing Act. I find this a bizarre legal exception, most especially because the housing market represents $4 trillion of national wealth versus $1.2 trillion in shares and roughly $1.2 trillion in various forms of deposits.

So while  your local bank teller has to provide prudent financial disclosure for simply trying to inform you that you might be better off with a 6.5% term deposit over your standard bank account, your local real estate agent can spruik to his or her hearts content about the virtues of the “never declining” housing market with impunity. The REIA website proudly declares its members exemptions to the AFSL:

Under the Commonwealth’s Financial Services Reform Act (FSRA) 2001, all companies or individuals that provide a financial service must either hold an Australian Financial Services License (AFSL), become authorised by an AFSL holder or qualify for specific ‘relief’ from the regime under an ASIC determination.

The FSRA does not apply to real estate agents in their capacity selling individual real property. It does however include financial services provided in relation to products such as general insurance and managed investment schemes.

Real estate is a sales business so I understand that some “flexibility” with the facts is justifiable. However, after just a few days training, agents can take so many liberties with the largest financial transaction the average Australian will ever make it leaves me incredulous.

But it gets worse, because in many cases it isn’t just the Real Estate Industry providing the “flexibility” in the facts.

It is well known that the print media and the real estate industry have financial partnerships; you wouldn’t get real estate lift-outs that are half the size of the Saturday paper if it wasn’t the case. I have no issue with this relationship per se, as long as it is clearly declared by the media outlets and their agents when they are producing content on behalf of the real estate industry. The problem is in many cases it is not. No doubt it is often simply sloppy reporting, but the occurrence is so widespread that it is difficult to not also conclude that some systemic corruption of standards is underway. Either way, it is a disgrace to both industries and an utter embarrassment to regulators for providing a legal framework that allows it to occur.

Following are a very few examples of what I am talking about:

June 14 2008, The Courier – Bucking the home loan trend

Same newspaper different page.

Feb 04 2009 The Australian – Mum ready to go shopping for second home

The memory of her mortgage rate rocketing above 9 per cent last year is not enough to scare Kirsten Friedli away from the property game.

Following the Reserve Bank’s decision yesterday to drop the cash rate 100 basis points to a 45-year-low of 3.25 per cent, Ms Friedli is ready to go shopping for her second home.

Kirsten Friedli works for Dougmal Real estate and has done for 14 years, it is never declared in the article.

Feb 05 2009 – Daily TelegraphIncreased grant ‘the difference’

Last October, Ms Chenery and her boyfriend Graham Burden had been shopping for a house in the Camden area. Then came the initial incentive to combat the economic crisis – the increase to the first home buyers grant. With $24,000 suddenly on offer for building – up from $7000 – the couple switched to searching for affordable land. Last month they bought a lot in Camden’s Spring Farm estate – one of 17 first-home builders to do so in January.

Emma Chenery worked at Prudential Real estate, it was never declared in the article.

Feb 05 2011 Courier Mail – First home buyers slowly returning to Queensland property market after historical low

Ben Markwell, 23, and Elizabeth Brier-Mills, 22, were among those to buy for the first time at the end of last year.

Mr Markwell said they decided to buy a home at Collingwood Park when they discovered it would not cost much more than renting.

He said the first home buyer’s grant was a great incentive to people their age.

“I think people now in their early 20s are quite interested in property. They are interested in getting their first home,” Mr Markwell said.

At the time of the article Ben Markwell was a property agent for Century 21. It was never declared in the article.

Feb 12 2011 Adelaide Now – Making the first home a reality

Lisa Vallely, who bought a block of land late last year at Northgate to build her first home, says the great Australian dream is still achievable.

“You just have to look at what you can afford and prepare for the worst when budgeting for interest rates,” she says.

Lisa Vallely is an agent at Harcourts, it is never declared in the article.

As you can see these non-disclosed conflicts of interest have been happening for many years in the Australian print media. I am aware of many other examples. It seems to be a disease that is slowly creeping across the editor’s desk of many media outlets and is an insidious abuse of power by the print media and a huge failing of journalistic integrity. Given the limited regulations governing the real estate industry I am doubtful this sort of behaviour is illegal in any regard, but it is without a doubt immoral and misleading. I am sure if a stock broker tried a similar stunt the ACCC would be most interested.

You expect this sort of thing from local publications which are widely known to do combined editorial and advertising deals. But you’d hope that any large “respected” newspaper would stop this sort of thing at the door.

Yet, in my opinion, none of the examples above come close to an article in yesterday’s Australian.

For Brisbane potential home buyer Laura Kavanagh the low prices have provided a great opportunity.

She and partner Joe Bishop are looking for a property in Brisbane’s inner south in which they intend to live for a few years and then “trade up”. “We’re getting into the market now basically because we can,” she said.

“We can afford it at this stage, and hopefully prices will rise in the next few years.” Ms Kavanagh and other buyers said that the doubts over future levels of interest rates were not really a big factor in their decision to to enter the market.

“I don’t think they will go up, but even if they did it’s still a good time to get into the market,” she said.

Damien Hackett, chief executive of Place Estate Agents, which handles property on Brisbane’s southside, said the market was in a similar situation to the early 1990s. “The Brisbane market is generally behind Sydney and Melbourne, and I expect history to repeat itself and as those markets are going up then Brisbane probably will as well,” he said.

Laura Kavanagh is not only an undeclared real estate agent who happens to work for the same organisation as Damien Hackett , but she is actually offering unsolicited real estate advice under the guise of being an independent first home buyer. This is extraordinary contempt for the public by the agents and an utter embarrassment for The Australian newspaper.

For the most part, real estate is governed by State departments of fair trading or by the hopelessly compromised real estate institutes. Given the level of corruption, the size and importance of the market, as well as the degree of vested interest in the papers, something has to change. I suggest a new, publicly funded and dedicated authority such as ASIC should assume regulatory responsibilities. At the very least, new offices of real estate Ombudsman should be established to hold misleading conduct to account. I’m open to other suggestions.


Hat tip to Dan and crew at Bubblepedia for providing information for this post.

Comments

  1. Deus Forex Machina

    I am enlightened…thanks DE…I had never thought of it that way. I will be printing this article and sending a copy with a lteer to Bill Shorten.

  2. How can this not be regarded as criminal behaviour? Newcomers to the housing market need to be protected from snake oil merchants!

    • Carbon Bologny

      I think this almost certainly raises some legal issues. Chief among those is section 18 of Schedule 2 of the Competition and Consumer Act which prohibits a person to engage in misleading or deceptive conduct, or conduct which is likely to mislead or deceive. This would apply to the real estate agents but the media may be exempt although an argument could be mounted given they aren’t acting as media in these stories, they are advertising. This provision doesn’t raise criminal liability but it might be used by anyone sufficiently aggrieved to apply to the courts for an injunction and to severely embarass those concerned.

  3. nice collection!

    it is strange that paper advertising is still so strong in Australia. In USA and most of Europe it is long time gone – internet killed it. Anyway, large number of newspapers (as well as large number of RE agencies) will simply go broke once housing market crushes. People will start selling homes by themselves and save half the average annual wage after a few dozens of work hours. Internet makes things so easy these days; it provides all information and tools that are needed to be able to do job even better than non-motivated and/or busy REA.

    • I can confirm that printed ads for real estate are indeed long gone in The Netherlands. Everyone uses http://www.funda.nl, downside being that this website is owned by a large real estate agent industry organisation (similar to the REIA). This means that in order to sell your house you NEED to use a real estate agent just because you NEED to get on that website. There have been attempts by competing organisations but they haven’t proven very successful.

      Although traditional ads aren’t as widespread as they are in Oz, companies in The Netherlands do send out massive amounts of press releases, usually about some interesting fact and casually mentioning the company’s involvement. Media in The Netherlands are not as blatantly spruiking though (but the more refined approach may be all the more evil because of it!).

      Agree on the internet thing. I have this radical idea that centuries from now historians will talk about the stone age, bronze age, iron age and connected age as major milestones in the development of the human race. The amount of knowledge available is enormous. This will change society, if only because of the major redistribution of knowledge and power from organisations to consumers/citizens. Much like when the bible got translated from latin so the ordinary people were no longer dependent on the church…. it changed everything.

      I’m a big fan of the NBN because imo it’s definitely not just about downloading videos…

      • Perhaps we can have a GetUp campaign. Everyone write to the editor of The Australian and inform them we will no longer buy their miserable rag and have changed to crikey.com, until they make an example of the journalist Andrew Fraser. Might put the wind up the rest of them.

        Re the NBN:

        Where is the wisdom we have lost in knowledge?
        Where is the knowledge we have lost in information?

        The problem with the internet in general is the appallingly bad signal to noise ratio. So much is rubbish, and drowning in rubbish before finding the few nuggets of truth is a common experience. The vast majority have adequate internet to access text sources, I’d argue that video resources, due to their high bandwidth demands, are in fact the principle reason for the NBN to be constructed (if we exclude stimulus to the construction industry/foreign internet appliance manufacturers of course). Frankly I’m unhappy about my taxes being spent on anything so absurdly wasteful. Make teaching a well paid profession and actually teach literacy, numeracy and critical analysis. Children should leave high school knowing how to balance a budget, how to analyse an investment opportunity, basic understanding of loans and the snakes in the grass who flog them, etc etc. An adequately educated population might be more resistant to this kind of collective idiocy. Adding in better trade and industry links to achieve relevance might actually keep the attention of students and prepare them for the outside world.

      • Well, if you talk to educators they will probably tell you there’s a shift in the focus of how and what students are taught. New teaching methods focus more on increasing students’ capacity to source reliable information themselves, filter out the garbage and how to process all that information into something useful.

        This in addition to proper education will not only ensure they have all those skills you talk about, but will also allow them to use the internet to get a more balanced view or to gain new skills in the future.
        Just a gimmicky example: When I was still living in The Netherlands I taught myself how to solder using a tutorial video posted on Youtube by an Australian bloke who wanted to show his dad how to tackle such a thing… fantastic. It’s video but used in a totally different, useful way.

        It’s such a misconception that the NBN is merely for downloading. Increased capacity is necessary for many things video-conferencing, long distance health solutions, working from home etc. A reliable network will also allow advanced technologies such as smart electric grids which need constant monitoring of production by many decentralised electricity providers (eg home-owners with solar power).

        Furthermore, the current state of internet in Oz is really not quite up to scratch. I don’t know about you but I have frequent dropouts here and the fact that blackspots even exist in urban areas is amazing to me. Also, previously I used to run lots services (webserver, vpn, etc) which I can’t do right now.

        In addition the network could provide cable tv, digital radio and telephone services as well of course.

        In the end it obviously comes down to personal opinion, often coloured by political ideology… Just be mindful that as much as with property there’s an awful lot of garbage being written in mainstream media.

        but oh well, I won’t hijack this discussion any longer for something offtopic. 😛

  4. Devilled Advocate

    DE – good post as always and I agree that RE agents should (as every other profession should) always disclose a conflict of interest.

    Having said that I dont know anyone that doesnt take thier “frendly” RE agents advice with a hefty serving of salt so in this regard they dont have the same relationship of trust and confidence as they would say with thier accountant solicitor etc

    No one expects them to have a PHD in anything and most people I know see them for the sales people that they are.

    Also unlike financial istruments per se there is a lot of due dilligence that buyers can do in property that they simply couldnt do (in most cases) when considering financial products.

    I think the slow dawning reality + affordability (lack thereof) and hopefully some smart government policy which we are hearing rumours about eg re NG will go a long way to injecting some common sense into the market.

    Here’s hoping any way.

    DA

  5. Good article- disclosure should be mentioned, but who is to say the journos didnt already know that the buyer is also an agent?

    In saying that, RE agents do purchase their own homes too don’t they?

    When hairdressers promote the products they sell on their salon are they made an inadequate reference?
    When car sales men make comment on a car in their caryard are you going to just take their word for it or do your own research?

    As mentioned by DA, take advice with a grain of salt.

    SP

    • Sally Periwinkle

      “When hairdressers promote the products they sell on their salon are they made an inadequate reference?”

      Those products dont require a 25-year mortgage to buy. Bit of a weak argument, don’t you think?

      • Are you saying a 25 year old purchasing a home would put pen to paper just because an agent said “it’s a good decision” ??

        I think it’s ridiculous that you think FBH or any buyers assume they would just take the words from an RE agents mouth without doing research themselves. A house is a huge purchase – your own research must be done!

        And if they don’t- then they must be completely broke because any salesperson must be able to corner them into purchasing some amazing face wash, a 12 month gym membership, extra warranty on a new toaster etc etc just because the salesperson said so

      • Sally Periwinkle

        Q) “Are you saying a 25 year old purchasing a home would put pen to paper just because an agent said “it’s a good decision” ??”

        A) Absolutely, this is Australia. It is different here.

        Q) I think it’s ridiculous that you think FBH or any buyers assume they would just take the words from an RE agents mouth without doing research themselves.

        A) Yes it is ridiculous, but you’ll find it has been a pretty common occurance in Australia over the last 15 years.

        Q) A house is a huge purchase – your own research must be done!

        A) Straw man. The issue is appropriate regulation of real estate, as is done with other financial matters. At least you seem to acknowledge that hairdressing products and homes are different. Which makes me wonder why you made the comparison in the first place.

      • I made the comment in a general way- to say that surely the common person does not just take word for things.

        I’m Australian, 23 and have numerous friends my age who have purchased or thinking of purchase and have taken months to make a big decision.

        I think the minority would say yes because they were told so- the ole jump of a bridge because he said so…..c’mon!!!!

      • Sally Periwinkle

        “… would say yes because they were told so- the ole jump of a bridge because he said so…”

        Sounds like a pretty good description of the Australian property market. But let’s not regulate it eh?

  6. Anyone with evidence of RE Agents misleading conduct, let me know.

    I have 100 examples of media misleading public about RE. They may be exempt from specific pieces of legislation – but s52 of Competition and Consumer Act is catch all and applied directly to this conduct.

    I plan on suing them in the biggest class action this country has ever seen. I only got admitted last year so it will be my first case…but what a way to start hey ; )

    No win no fee of course! There will be hell to pay once this blows up. Irish papers are beign sued for this exact conduct, so there is precedent.

    • You’re all heart Stavros…I’m assuming that any or all monetary gains will be given in full to charity, and that this is not simply another case of the same type of self-serving bottom-feeding activity that is in question here anyway. That would be ironic now wouldn’t it?

      Next to some members of the legal fraternity, the ethics of the real estate profession seem positively righteous!

      • I paid for some very good legal advice before not signing an off the plan contract. Lawyers actually have very strict requirements for their profession as the are responsible for any advice they are giving. They also cant do things like representing competing parties.
        A great piece of legal advice is:-
        You pay a lawyer to be your friend, everyone else is an adversary!

  7. Can we intern all our real estate agents in concentration camps on Christmas Island? I think we’d be much better off swapping them for some entrepreneurial Afghan and Iraqi refugees.

    • This needs to get broader media exposure. Which MSM will have the guts to shoot themselves in the foot?

    • I had same idea with you and just did it by sending this blog URL link to the Media Watch tip-off online form.

    • Prince, I have done this many times already. And the ACCC, and the less conflicted newspapers…

      No one wants to touch it. But the courts will look at it and its clear as day this is illegal.

      I just need someone who has been duped and I can pursue their case for them…I dont have any “legal standing” as I am on the sidelines of the housing market.

    • Prince, I was the source (to GHPC and bubblepedia) of the first article and ad and informed Media Watch on the same day. The researcher contacted me and was very keen and asked me to send it express that day. I did so and sat in front of the TV next Monday waiting for “my” story. Nothing.

      I also wrote to the offending newspaper. To their credit they published my letter.

      • I’ve had a few similar responses from Media Watch from forwarding similar stuff in the past, but they never go ahead and run the actual stories — pretty weird, as they don’t seem to mind showing up TV and newspaper journalists regularly.

        Wrote to them yet again — and crikey.com…

      • Sally Periwinkle

        The ABC seems as pro-property as the commercials. Not surprised you get no interest from Mediawatch.

  8. “Caveat emptor” has always been the case with just about everything. Why pick on real estate agents?
    My nephew just bought a house for a huge some of money. He (and his wife) were very coy about the purchase and didn’t divulge it to the family in case we tried to talk them out of it.
    We think he paid too too much but how can you help/advise people when they don’t want to know.
    This was an emotional purchase with no regard for the financial commitment made now and well into the future.
    You can’t save people from themselves and I am not sure we have a philosophical right to do so.

    • This is outright market manipulation.

      They are attempting to obtain a benefit by deception, and are engaged in fraudulent activity.

      We already have enough legislation in our various Crimes Acts to deal with this type of deceptive behaviour, and we don’t require section 18 of Schedule 2 of the Competition and Consumer Act.

      We just need the police to be doing their jobs, and they should start questioning the various agencies and their staff who have been involved in this nasty behaviour.

      The real estate sector in the country is simply out of control.

  9. Blatant market manipulation, supported by MSM and apparently condoned by our regulators. I weep for this country.

  10. innocent bystander

    “in The Netherlands. Everyone uses http://www.funda.nl, downside being that this website is owned by a large real estate agent industry organisation (similar to the REIA). This means that in order to sell your house you NEED to use a real estate agent just because you NEED to get on that website. ”

    in case anyone wishes to sell RE privately (something I have done previously and am considering again in 6 months or so – personal, not market timing reasons), and is unaware of how to get onto the major OZ re websites.

    these links maybe of interest. I am not affiliated with them and haven’t used them (yet), just ones I have dug up in my research in getting ready to sell.

    http://www.sellsmartonline.com.au/
    http://forsaleforlease.com.au/

    My previous private sale experience (about 7 years ago) was very successful but bear in mind you are limiting your market since the large proportion of buyers want to go via a RE agent (must be like buying a car from a yard rather than privately) – for some reason they feel more secure in their purchase. In fact one potential buyer brought an agent to help negotiate their offer!

  11. Carbon Bologny

    I think this almost certainly raises some legal issues. Chief among those is section 18 of Schedule 2 of the Competition and Consumer Act which prohibits a person to engage in misleading or deceptive conduct, or conduct which is likely to mislead or deceive. This would apply to the real estate agents but the media may be exempt although an argument could be mounted given they aren’t acting as media in these stories, they are advertising. This provision doesn’t raise criminal liability but it might be used by anyone sufficiently aggrieved to apply to the courts for an injunction and to severely embarass those concerned.

  12. Many thanks for enlightening me! Won’t ever take these stories at face-value again.

    I hope the media eventually get held to account. The responsibility lies with them, and while the loopholes exist it’s obvious the Real Estate industry will take liberties.

  13. Has anyone questioned that the journalists knew the published were in the industry?

    Just a thought….RE Agents aren’t the only crooks out there!
    Everyone knows that the media twist any situation to make a good story!

    • I assumed this is just another way of making money… I look at printed media as 90% ads, including the so-called ‘articles’.

  14. Good article. As Stavros says there are hundreds if not thousands of examples of this illegal spruiking. Trade Practices Act s52 catches this type of conduct and we just need to get at good ‘test’ case to run in the courts. Roll up if you have been financially harmed by this unethical conduct

    • That’s right, see my comment above although its not s52 of the TPA any more. The provision also captures conduct that is likely to mislead or deceive so you don’t even need to have been actually mislead or financially harmed. I seems possible that someone could bring an action to simply get an injunction against them and to publicly embarrass those responsible in the courts.
      (this is not legal advice)

  15. Its definately an interesting article – but having a jounalism background AND now also being a real estate agent (disclosure) I wonder what prompted you to write this article. There is a lot of emotion and anger in it – which potentially leads to a conflict of interest and a bias prior to writing.

    Having said that, and with the background I have – I can clarify a few points. Firstly, in most cases there won’t be a deliberate attempt to decieve. It’ll be journalistic & business laziness – the journo will have asked for the agency to provide someone they can talk to as a buyer and the agency will have provided they’re most recent purchasing agents – simply because it’s easier than having to ask clients to talk to the media. There will be a few cases where someone thought “ooh i can benefit here!” as there always are – but the vast majority will have acted out of a unwillingness to talk to as clients to step out of their comfort zone.

    As for being tied to the AFSL – you’re right we’re not – but that is absolutely irrelevant and you should have spread your gaze further afield. We’re tied to the PAMD (Property and Motor Dealers ACT QLD 2001) in QLD. And it expressly states that we cannot give financial or advice relating to financial gain when purchasing a property. We can not provide valuations – only market opinions etc. So your claim that agents should be tied to the AFSL is way off base. Having said that – Agents who are providing “financial advice” are acting in contravention of the PAMD (in QLD) and can be fined astronomical amounts of money – they can forfiet their commission and be liable for massive damages.
    Best example the agent who says “Yes you buy this property and you’ll see $xxxxx in capital growth over the next X years” is giving financial advice and is acting illegally.

    While your article raises some very fair points, it also lumps the all agents in the same basic as the few unethical and bad agents out there – punishing an entire industry for the acts of a few bad eggs. Further more it shows minimal understanding of the legislation surrounding property sales at least in QLD, but most states have similar legislation and are similarly applied.

    Your beef would be better expressed as “The general public needs to know more about the actual legislation surrounding the sale of their property and the code of conduct that all agents must be held to by law”

    • John. Given that your industry is being tarnished by the rogue agents caught-out in DE’s article, don’t you think it’s time that you and your industry colleagues exercise a bit of industry self-regulation and discipline these “bad eggs”? I find it quite extraordinary that you are defending such actions which, to just about everyone else in the community, is beyond the pale.

      Clearly the PAMD is also a toothless tiger as it has allowed the real estate industry to get away with such behaviour for far too long.

      • Aw, jeez, c’mon Leith,

        That’s a bit of a big ask, isn’t it?

        Surely it would be quicker if they only had to find the good eggs, then get rid of the rest?

        It’s kinda prophetic though, dont you think, that real estate agents are governed by the same legislation that governs used car salesmen 🙂

    • Although a home is like a car, i.e it is not an investment, it is a consumption item, and it is expected to depreciate over time, due to the relative impact on the household budget in a macro and long term sense, transactions on dwellings should be regulated at a much higher level.

      Putting RE agents and principals on the same level in terms of indemnity, advice and education standards as financial planners and their Responsible Managers (i.e AFSL licence holders) will be a great stride for an industry that should professionalise itself.

      Like FP, RE needs to get away from transaction based commissions and towards fee for service and full advice. FP is halfway there (not all commissions are banned yet, sadly), but RE and mortgage brokers have a long way to go.

      This should be done as part of a macroeconomic reform to get State Governments off the drug that is Stamp Duty – which requires an unsustainable amount of RE transactions to provide revenue for basic services.

    • Oh, come on, John,
      You surely aren’t asking us to buy this cynical tripe as being simply ” journalistic & business laziness” are you? What an indictment of both industries (and I use the term “industry” advisedly).
      You call these people “journalists” – wow, things have certainly changed in the last few years, haven’t they?
      I don’t suppose that there could be any chance of this being a flagrant case of “you scratch my back, and I’ll scratch yours”, could it? You know, like, “You keep paying for nice coloured real estate supplements in my publication, and I’ll make sure that there’s always good news about real estate being printed” type of thing?
      And you’re suggesting the journo (so-called) approached the agency for a buyer to interview? How about the other way around?
      As for PAMD keeping the Qld real estate game under control – well, that’s worked well, hasn’t it?
      If the legislation surrounding property sales in Qld, or anywhere else, allows for this sort of cynical deception (or laziness, if you prefer) without some form of severe sanction, then the law truly is an ass.
      Pull the other one, John.

    • This doesn’t sound plausible, John, concerning newspaper journos ‘not knowing’ what’s going on when it clearly goes on all the time as a standard practice and RE advertising comprises 40% of a paper’s entire revenue. Insiders tell us of phone calls from the RE industry setting these stories up.

      I don’t know why people study journalism at uni at Masters level, especially in ethics, when this sort of thing goes on every day in the papers. Fred Hilmer on taking over at Fairfax opined to all the journos that ‘the news is just a wrapper for advertising’ in the newspaper business, but advertorial without disclosure is another step further.

      Interesting what you say about the Qld PAMD Act, I spoke to a (young) Sydney real estate agent recently who told me earnestly that ‘property in Sydney doubles every seven years’ as though this was some sort of fact. If it was the actual case, you would not be selling real estate, you would be buying it, from any source of credit possible, to amass as much as possible, because no other asset class or investment in the world ever goes up at that rate. (And even a small place in a couple of years would start at $1M and a place 150 years ago would have cost 0.0001p to buy.)

      • I spoke to a (young) Sydney real estate agent recently who told me earnestly that ‘property in Sydney doubles every seven years’ as though this was some sort of fact.

        Well, this is their standard promo message along with “you will miss-out if not buying now” or “property prices cannot go down” and “you can afford to buy because interest rate is stable / low and economy is good”.

        Those rogue newspaper articles in English MSM are just tip of iceberg. I have seen more “liberal” spruiking in the ethnic newspapers / magazines because they don’t think authority will do check and control in non-English news-piece / unethical advertisement.

      • Interesting, Deo, I wouldn’t mind getting some examples from you? Can you go to my website and get my email from there? Or paste in some info here…

      • See the link below:

        http://www.indomedia.com.au/Apr%20Edition%2011/Apr.html

        Magazine in English and Indonesian basically for Sydney residents from Indonesian background. Check-out page 5 where the ad says “anytime is good time to buy property and this is proven strategy for real investor” at the page bottom. The ad at the top also says that “now is good time to buy rather than paying rents that are getting higher”.

        Also check interesting ad on page 21 basically promising you dodgy home loans even if you don’t have prove of income and bad credit ratings plus helping you to do your tax return and claim superannuation 😉

        Most outrageous claim is on page 33 (this one in English). The agent promised you can have a property with less than $50 / week cash outlay by taking advantage NG break from ATO and not to worry about interest rate and affordability because he can help you to get good property in good location 😉

      • I know better

        That line “property values double every 7 years” is an international mantra that’s been pandered around in real estate industry for a long time. i’ve heard it said many times not just here, but in the UK, Canada & the USA as well.

        well as someone who works closely with the professional property valuation industry here in Australia, this is simply not true. in fact i have seen many examples myself in the past 25 years where many property asset valuations have gone backward. its a fact that NOBODY can predict anything of value in the property market. consequently it is pure speculation & nothing is of value for certain. the mere fact that sales people can say this tripe & get away with it is truly criminal.

        good luck for those pursuing class actions against the RE industry, i truly hope it is successful.

      • Nope, you just get many more typos and garbage writing as a result of that. Even the headlines will go down the toilet, as they used to have specialists to write quality headlines!

        A recent example is News (very) Limited on Osama bin Laden who spelt ‘withdrwl’ twice that way, and noted in their headline that ‘Osama bin Laden dead, US reward for capture or death withdrawn’ — no kidding!

        http://www.news.com.au/world/osama-bin-laden-dead-us-has-the-body/story-fn8ljm6z-1226048335673

        (I don’t think the US has the body either, despite the URL. Accuracy in the fine details! Murdoch has never let the facts get in the way of a good story, after all…)

  16. Stavros, et al.

    Refer the practice to ACA/TT. Their standards are so low and they are so desperate for a news item that they’ll latch onto this one.

    SImply parade some greater fools who’ve been taken in by the spruiking. Camera in RE Agent faces. Car park confrontations. Slamming doors etc.

    Its very emotive stuff for The Bogan and would do wonders to spread negative sentiment.

    • Depends whether ACA/TT have any interest in real estate revenues, or not upsetting the giant and powerful real estate industry. Concentration of media ownership laws tend to keep newspaper owners apart from TV station owners, but there could be other links — including elite golf club links. It’s fine to chase little guys around with cameras who defraud shoppers, for instance, but don’t ever go after big business. That would be serious journalism then, after all.

  17. John – love your response mate. “Journalistic and business laziness” that just happens to promote the mutual interests of the property industry and it’s major marketing channels.

    The rot in the RE industry will be exposed as the bubble unravels. If you’re worried about your reputation, make your move now.

  18. One of the single biggest outgoings of the ATO budget is negative gearing. Why are we taxpayers subsidizing our own demise?

  19. This is disturbing.

    Can anyone advise as to whether I can find ASIC’s determination that provides that Real Estate Agents are not required to hold an Australian Financial Services Licence?

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  21. I think you will find Delusional Economics, that ASIC want control of the housing market in it’s entirety and is not too far away from happening either.

    It is only a matter of time before a submission is lodged with the federal government to bring an end to all this nonsense. ASIC and the government have copius amounts of information regarding the conduct and the ongoing disclosure issues affecting consumers and businesses – which inturn makes it difficult for ASIC to regulate the financial sector.

    State governments and their piddly agencies just don’t have the stomach to regulate the housing market – they cannot even properly govern the conduct of real estate agents.

    This article confirms oversight of the housing market by the securities regulator is ‘the next logical step’.

    http://www.theage.com.au/business/asic-as-the-safe-house-20100719-10hx8.html