The liberties available to the real estate industry over other purveyors of financial goods is a constant source of angst for me. The fact that a real estate agent is able to spruik to his or her hearts content about the virtues of the “never declining” housing market with impunity while your local bank teller has to provide full financial disclosure for simply trying to inform you that you might be better off with a term deposit over your standard bank account is a bizarre oversight of national financial prudences.
The fact that a member of the real estate industry doesn’t require an Australian Financial Services License is bad enough, but when you mix this with the opaque relationship their industry has with the media it is a recipe for moral hazard. I have previously exposed a number of examples where this relationship has overstepped the line of what I consider morally decent behaviour and what I think a normal person would consider a breach of the limits of acceptable advertising. From a previous example:
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.
Due to the self-protecting ability of the media is it quite rare to get a glimpse inside this relationship to see exactly how dangerous it can be for vulnerable members of the public. Apart from some independent voices such as MacroBusiness it is rare to find stories challenging this relationship even though I understand many people, myself included, consider some of the big name newspapers to be real estate magazines with news supplements attached. But every now and then a story gets out exposing this relationship for what it is; a set of dirty cogs at the delivery end of the politico-housing machine: