Laborâ€™s negative gearing proposal will flood the market with spruikers and endanger the financial lives of thousands of Australians, according to the Property Investment Professionals of Australia.
PIPA chairman Peter Koulizos said the policy would encourage unscrupulous operators into the market looking to take financial advantage of everyday investors.
â€œWhen you financially incentivise people to buy a particular product, spruikers are not far behind because they see an opportunity to make a lot of cash very quickly,â€ he said.
â€œThere is currently no legislation to protect consumers from dodgy operators pretending to be property investment experts.â€
Mr Koulizos said that industry research already shows that Laborâ€™s policy is based on incorrect modelling.
He said the assumptions it makes regarding the number of investors who already buy new property and the revenue it believes it will raise are both inaccurate.
â€œIt will be like the pink batts fiasco all over again, which was another terrible Labor policy,â€ Mr Koulizos said.
â€œThis time, it is an ill-conceived negative gearing proposal that is being rolled out too quickly and is likely to have financially catastrophic consequences for investors.
â€œWeâ€™re talking about people investing hundreds of thousands of dollars into properties that are likely to be overpriced and inferior in every way possible.â€
Mr Koulizos said the $18 million fine imposed on We Buy Houses and its director, Rick Otton, for misleading property buyers and investors last year proved that regulation of property investment advice is needed.
â€œIf Laborâ€™s absurd policy comes in, expect more investors to lose their life savings to corrupt charlatans who have no fear of the consequences because of the lack of regulation in the property investment advice space.â€
Mr Koulizos said that PIPA has developed codes of ethics and conduct, which all of its members voluntarily agree to abide with, as well as professional standards of accreditation and education for the property investment industry, including a Qualified Property Investment Adviser (QPIA) accreditation course.
Tim Neary, Real Estate Busines, 7 May 2019