As surging real estate markets throughout Australia prompt the unwelcome return of property spruikers, the Australian Securities and Investments Commission says it will take firm action against suspect and unseemly business practices.
Property spruikers were a prominent feature of the boom in Australia’s real estate market around the turn of the century, touting get-rich schemes for everyday investors which frequently fell disastrously short of expectations.
ASIC now says the rapid rise in property prices has triggered the emergence of a fresh wave of property spruikers, many of whom are specifically targeting self-managed superannuation funds using methods which could well be in breach of the law.
“We’re certainly seeing an increase in advertising that’s specifically directed to SMSF’s,” said ASIC commissioner Greg Tanzer to ABC News.
Members of industry concur, pointing to the re-emergence of seminars with eye-catching headlines that promise untold riches to credulous investors.
“They’ve gone into their hibernation for a few years but they’re certainly back in force at the moment,” said consumer advocate Neil Jenman.
According to Jenman, the new wave of property spruikers have already bagged their fair share of victims with false yet extravagant promises.
“People are, without realising it, already losing thousands of dollars,” he said.
Tanzer says ASIC is determined to prevent spruikers from using the current surge in property prices to fleece poorly informed investors, pointing to the potential prosecution of salesmen who attempt to sell real estate to self-managed funds without possessing qualifications for dispensing financial advice.
“[If] you’re encouraging [property] investment through an SMSF, ASIC’s jurisdiction might be enlivened,” he said.
Spruikers are emergence in response to the recent surge in real estate prices throughout Australia, despite mounting evidence that the country’s mining sector has entered a state of inexorable decline.
Sydney’s property market just logged its strongest September on record, with three consecutive weeks of auction clearance rates above 80 per cent. The city’s home values are now up 8.6 per cent for 2013 and 8.2 per cent since September 2012.
Melbourne’s property market is also enjoying a stellar performance, with home values currently up 5.9 per cent for 2013.