Two-tier Marketing Falls Into Accc's Probe List

The Age

Saturday September 13, 2003

ENZO RAIMONDO

The REIV welcomes the ACCC investigation into ``get-rich-quick" property schemes. The REIV is a strong advocate of regulating such schemes and licensing their operators.

The ACCC will investigate two-tier marketing; advice given by financial consultants, solicitors and valuers; ``unconscionable" conduct by financial institutions; and real estate investment seminars, for breaches of the Trade Practices Act.

A two-tier property is one sold at a price substantially higher than market value through high-pressure sales tactics and without independent valuation.

These practices often take the form of development schemes that rely on loans provided by a company linked to the one selling the real estate. Investors are often lured to attend seminars where they are offered help, including financing, to buy investment properties.

The REIV has also been concerned about a number of so-called consumer advocates running property seminars. The institute concurs with ACCC chairman Graeme Samuel's statement that people selling real estate in the form of financial investment vehicles should be accountable.

Property investment is a long-term investment. However, like any other form of investment, you should take a realistic approach and not expect instant wealth.

Enzo Raimondo is the chief executive officer of the Real Estate Institute of Victoria.

© 2003 The Age

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