A peak real estate industry group has warned a Labor victory at the upcoming Federal Election could result in surge in activity of property spruikers.
The Real Estate Buyers Agents Association of Australia (REBAA) believes a Labor victory would have unwanted repercussions for the property advice space given the fact changes to current negative arrangements would follow.
REBAA president Rich Harvey said Labor’s plan for negative gearing to be applicable to new builds only from 1 July 2017 would provide spruikers with increased ammunition given new estates and off-the-plan projects are commonly pushed by unscrupulous operators.
“Removing established housing from negative gearing will remove the incentive to buy established housing stock. It implies that new properties will become a more attractive investment proposition for many people,” Harvey said.
“The reality is however that new housing stock is predominantly located in outlying housing estates that rely on off-the-plan property purchases that attract their fair share of property spruikers,” he said.
Harvey also said a Labor victory would also see dodgy operators come out of the woodwork as investors look to enter the market before any negative gearing changes come into effect.
“If Labor wins the election, we anticipate there will be a rush of investment activity in the lead-up to July 2017 as investors seek to buy established properties before negative gearing for established properties is abolished,” he said.
“Homebuyers and investors need to be aware that immediately following this we anticipate an increase in property spruikers offering seminars on new housing or apartment developments that could result in big financial losses.”
For those considering a purchase, Harvey said it’s important potential buyers ensure whether any advice they receive is truly independent.
“If they accept sales commission from vendors or developers then they cannot be classified as independent as they are acting in the interests of the seller,” he said.
“Another key question to ask is the nature of their relationship with other service providers. Are they disclosing any commissions or kick-backs from builders, inspectors, sales agents or other companies that are closely associated with the purchase?
REBAA’s top tips for identifying a spruiker:
- Field and experience - Look for agents who have a minimum of 12 to 24 months’ experience in the particular area that you are interested in and find out about their recent purchases.
- Credentials - Check with the relevant state’s department of fair trading to ensure anybody offering advice is appropriately licensed and insured. They should also have the relevant qualifications.
- Contacts - A good agent will have a wide network of selling agents to access properties off-market and earlier than the general public. They should also be able to connect with you the representatives of complementary professions.
- A solid track record - Ask for references from at least three recent clients who you can contact to discuss their experience with the agent.
- REBAA membership - If they aren’t a member, ask why not. REBAA is Australia’s only national professional association for buyer’s agents. In order to become a member, agents must go through a stringent process. Once an agent is a member, they have to adhere to a strict code of conduct.
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