Issue Date:  -  Friday, 30 November 2001

Investor seminars not what they seem.

Consumer Protection Commissioner Patrick Walker has warned country residents to be wary of negative gearing seminars promoting investment property in Queensland.

These seminars involve "two-tier" marketing practices, which means interstate and non-local buyers pay far greater prices for real estate than local well-informed buyers. The uninformed buyers are specifically targeted in order to achieve greater rewards for the "property marketeers".

Mr Walker said "property marketeers" use the seminars to identify potential investors who are flown to Brisbane or the Gold Coast and sold overpriced real estate particularly in South East Queensland.

One seminar has already been held in Albany and it is possible others have been organised throughout the state.

"These seminars are very well known to the Queensland Office of Fair Trading and we have evidence that they have moved into Western Australia," Mr Walker said.

"I am very concerned that Western Australians may be duped into paying inflated prices for Gold Coast or Sunshine Coast property."

Investors are identified locally and then flown to Queensland in order to inspect potential investment properties. During their time in Queensland they are given little, if any, time to themselves and have limited opportunity to seek independent investment advice.

They are shown properties owned by the "property marketeers" or that are being marketed on behalf of developers closely associated with them. The "property marketeers" then take them to "independent investment advisors" and supposedly "independent legal advisors". Contracts are signed and the investors are then flown home.

In the majority of cases the "property marketeers" receive commissions far in excess of those allowed in normal real estate transactions.

"There is a definite conflict of interest involved in these transactions as investors are not given the opportunity to seek independent information about the market they are buying into and the finance consultants, valuers and solicitors they do have access to do not provide independent advice," Mr Walker said.

"These schemes involve high pressure sales techniques and are known to have netted the operators millions of dollars."

As the real estate transactions occur in Queensland, WA consumers are not protected by West Australian legislation.

However, the Queensland Government has introduced legislation that regulates all persons involved in the sale of real estate and protects consumers with mandatory disclosure requirements, warning statements and cooling off periods in respect of real estate contracts.

"Don't be conned. If you are considering investing in real estate make sure you research prices in the area, seek independent advice and deal with licensed real estate agents."