THE long-awaited report from the banking royal commission proves that even within regulated environments lawlessness can be rife.
Property Investment Professionals of Australia (PIPA) chairman Peter Koulizos said the multitude of examples of potentially criminal activity within the financial services sector was a sign of what can happen when money becomes more important than client outcomes.
“If this is what happens in a regulated industry, imagine the situation in the property investment advice sector where spruikers can ruin people’s financial lives without much chance of prosecution because it is an unregulated environment?” Mr Koulizos said.
The corporate regulator has begun proceedings in the Supreme Court after allegedly uncovering unauthorised property investment advice.
In a statement, ASIC alleges that Richard Gardner and Advanced Wealth Financial Services provided advice to clients about:
establishing a self-managed super fund for the purchase of a newly built investment property;
specific properties for development; and
specific developers or builders to build the investment property.
Additionally, ASIC also alleges that Mr Gardner received substantial commissions from the builder or developer used for building the investment property.
The way property is bought and sold has changed a lot in Australia over the past few decades.
Not only have we seen listings move from shop windows to online portals, but buyer’s agents have become a growing part of the sector, too.
While they have been a part of the profession in the US for a long time, it is only in recent times that they have staked a claim here.
Compared to selling agents, they are still a small minority of the sector, and like so many things it is taking a while for legislation to catch up with change.
And that’s why it’s imperative that you do your homework before engaging someone to buy property on your behalf – because sometimes they might not be what they seem.
New research from the Property Investment Professionals of Australia (PIPA) has found that one third of first-time buyers are opting to invest rather than to buy a home.
The 2018 PIPA Investor Sentiment Survey found that about 36 per cent of first-time buyers had opted to invest in property and continue to rent instead of buying a home to live in over the past 12 months.
PIPA chairman Peter Koulizos said while it was the first time that specific question had been asked in the annual survey, one could presume that rentvesting as an investment strategy had been a trend for some time.
“What this insight shows us is that first-time property buyers generally have probably been more active over recent years than official statistics originally recorded,” he said.
Softening values in key markets like NSW and Victoria are exposing investors and home owners to mortgage defaults, particularly if they are heavily leveraged to secure a property.
Spurred by falling property values, Moody’s predicts a rise in 30-day arrears for Australia’s residential mortgages.
The ratings agency tips NSW and Victoria to top the list, as the states that have had the biggest price drops proportionately.
Loans being converted from interest-only to principal and interest will also force delinquencies. The push to principal and interest payments in 2018 was in part due to the banking regulator’s cap on interest-only lending, which has lifted for lenders from this month.
