The Labor Party's plan to limit negative gears on new properties could attract investors to the market, according to the Property Investment Professionals of Australia (PIPA).
"When you financially incentivize people to buy a particular product, the spruikers are not far behind because they see an opportunity to make a lot of money very quickly," said Peter Koulizos, president of PIPA .
Koulizos is concerned that there is currently no legislation protecting consumers from questionable operators claiming to be real estate investment experts.
Koulizos stated that, according to industry research, the Labor Party's policy is based on mistaken modeling of the number of investors who are already buying a new property as well as the revenue it hopes to generate.
In addition, Mr. Koulizos said that financially corrupting investors for them to buy new property would create the ideal conditions for spruikers to flood the market.
"It will be as if the pink bats fiasco was a terrible new labor policy," he said. "This time, it is a poorly designed negative conversion proposal that is being implemented too quickly and is likely to have catastrophic financial consequences for investors. We are talking about people investing hundreds of thousands of dollars in properties that may be overvalued and inferior in every respect. "
Last year, the Federal Court imposed record fines of $ 18 million on We Buy Houses and its director, Rick Otton, for making misleading statements about how people could create wealth by buying and selling real estate, as a result of an action by the Australian Competition & Consumer Commission (ACCC).
Koulizos said that the incident proved the need for urgent regulation in real estate investment advice. "If the Labor Party's absurd policy comes into play, expect more investors to lose their life savings in favor of corrupt charlatans who do not fear the consequences because of the lack of regulation. in the area of ​​real estate investment advice, "he said.
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