National regulation plans for property spruikers

The federal government has outlined plans to consider federal regulation of property investment spruikers, in an attempt to regulate activities and protect consumers from dodgy transactions.
 
Noel Dyett, president of the Real Estate Institute of Australia (REIA), said the announcement is welcome but long overdue.
 
“Over the past five years, there have been a number of inquiries into the unregulated activities of property investment spruikers, including a 2005 bipartisan report by the Parliamentary Joint Committee on Corporations and Financial Services, which recommended that those providing property investment advice should be licensed under the Financial Services Reform Act,” Dyett said.
 
“The inaction of governments at both state and federal level to address this problem has resulted in the potential for consumer harm, which could be avoided with a more proactive response.”
 
He added that the REIA believes the current situation, in which property investment spruikers conduct “totally unregulated business”, is unacceptable. 
 
“Anyone providing financial services advice should be licensed as a financial services provider, including those providing investment advice about real property. Anyone dealing in real property itself should also be licensed as a real estate agent, including property developers,” Dyett said.
 
“This is a financial services issue which should be addressed at the federal level. A national approach is required to regulation of property investment spruikers. They often don’t confine their activities to one particular state, and a nationally consistent regulatory environment is required to ensure that consumers across Australia are protected adequately.”
 
Dyett added that real estate agents doing their normal work of selling, leasing and managing property, and who provide information on past performance of property prices and about rental returns, are already highly regulated under real estate licensing legislation, and shouldn’t require additional regulation to carry on their businesses.

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