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Queensland OFT Report

A special Report was put together by Don Dickie for the office of Fair Trading in 1998 and out of that report came some interesting points that support Chris' opinion.

  • Both the OFT and the people doing the report, thought the Property Marketers were selling High Rise Apartments when in fact none were ever sold by any Marketers that we knew of, the results of this report must therefore be viewed with some scepticism because of this fact. High-rise apartment sales have always been the main area of sales that have been conducted by the Local Real Estate Agents on the Gold Coast as they don't work well as Investment properties normally due to their high costs and low rents. So you be the judge, you may note that they do quote Chris in the report many times.
  • The other point to note is that despite their predictions that Chris' capital Growth figures were to high, almost all of the properties have outperformed the projection of doubling in 10 years and in a lot of cases they improved substantially more than estimated.
  • Another part of the report proves Chris' point about the supply and demand and how one company profited from this drop in demand and then resold the property at a profit very quickly. The suggestion is they sold them overpriced, nobody knows whether this is fact or conjecture without doing a full report and looking at the results over a long period of time, it was not Chris' company that sold the properties though.
  • It also mentions how Chris had 2 seats on the board for the working party that brought in the new PAMDA Real Estate Laws in Queensland just to back up what Chris said.
  • Valuer Heron Todd White makes a comment about there being an oversupply of townhouses, yet they all got rented out and now the latest report on Property demand for South East Queensland states that we have an 8,000 per year shortfall of dwellings compared to demand up until 2026! The Federal Government is also giving incentives out for low cost housing to produce more affordable housing, could they mean, more townhouse type dwellings? The same type that this report says we have an oversupply of?
  • Another interesting point made in the report is that they find that about 50% of the new properties sold in 1998 were sold by marketers, that number has gone up now Reports would suggest and it could be as high as 80%, no wonder the Local Real Estate Agents say it is slow?
  • The final point to make is that no selling of overpriced property could occur if the OFT had used Chris' idea of making developers or resellers of properties get Valuations for Mortgagee Purposes and providing them to potential buyers. Unless of course you use dodgy financiers which some of the dirty agents, developers and marketers do, they are a very small minority though.
  • Instead we have the situation where a developer, agent or a marketer can buy and sell their own property for whatever price and avoid the legislation that makes the agent disclose their commission and marketing costs. There are plenty of ways around the legislation if you know what you are doing and think a bit laterally. As said many times, if the Mortgagee Valuation was made mandatory no overpriced selling could occur for anybody or entity who sold more than 3 properties per year.
  • Either a property is worth what it s being sold for or it is not, the amount given to a real estate agent or spent on marketing or where the purchaser comes from is irrelevant, the valuation is all that should matter.
  • There are plenty of developers and Marketers that develop and market their own stock and they only have to disclose a very small commission. House and land are exempt, because the builder does not have to disclose his marketing and commission expenses, so the Disclosure issues are an absolute joke and do nothing to protect consumers.
  • All it h did was add paperwork, bureaucracy, slowed down the development industry which has caused a shortfall of 8,000 dwellings per year, well done, Herriot and the Minister for Fair Trading.

The report has been reproduced here in PDF format and can also be found at www.melaleucamedia.com.au/_.../Two%20tier%20marketing%20report.doc -

 

 

 

Preview of picture in folder OFT REPORT PDF