“A pick-up in the property spruiking business is a signal things may be getting a little too exuberant,” HSBC Australia’s chief economist Paul Bloxham told the Australian Financial Review.
The former Reserve Bank official co-wrote a 2010 central bank study into the causes of the 2003 Sydney housing boom and bust.
Mr Bloxham’s original report noted that one of the alarm bells about Sydney’s overheating market a decade ago was a crackdown on property investment seminars and increased scrutiny by the tax office of rental deductions.
“Some of the telltale signs are there,” he said.
Speaking to Real Estate Business, former real estate agent and consumer advocate Neil Jenman said the level of property spruikers in the market is 10 times worse than the last property boom a decade ago.
“This generation of spruikers saw that scores of spruikers got away with ripping hundreds of millions of dollars from thousands of victims last time, and are fearless,” he said.
“These investment companies have seized probably 75-80 per cent of the market, which means that all of these people are being ripped off.
“Real estate agents these days don’t sell as many investment properties as they used to because people these days when they go to a real estate agent think about buying their family home - it is not the type of mine it used to be,” he added.
Prominent real estate trainer Tom Panos said history shows that every time the real estate market picks up and the media is talking about capital growth, prices going up and interests rates are low, it all of a sudden it inspires a lot of people to get interested in real estate.
“There are groups of people who are quite vulnerable and they hear attractive stories that are really enticing and seducing and because they are new to it they are attracted to the fact there are quick rewards to be made with little effort and little risk,” he told Real Estate Business.
“But in fact, it is generally always too good to be true.
“A majority of these companies sell real estate by teaching real estate investing, and then also try and make money out of the sale of the property. They prey on vulnerable mums, dads and single people who want to get into the real estate market but don’t know where to start,” he added.