Buyer Beware - Sharks Are Circling
With only days until the federal election, it is evident that Labor’s negative gearing policy will either make or break its chances of winning.
Property experts have always considered the policy to be based on incorrect modelling, which may cause significant damage to our economy at a time when it seems to be just treading water.
You see, from 1 January 2020 Labor plans to restrict negative gearing to new property only. As a result of this policy we expect the market to be inundated with property spruikers. When you financially motivate people to buy a specific type of property (in this case new builds) there will also be property spruikers not to far behind looking to make money.
How can I spot a property spruiker?
Unfortunately, I come across many people who have fallen victim to property marketers/selling agents who promise unsustainable returns that never eventuate. Of these people I speak to, most have been sucked into buying off the plan apartments in high density developments or house and land packages located in areas with very little amenity, infrastructure or historical sales data.
The way you can spot a spruiker is by asking them how they are paid!
If they are paid a commission by the developer, builder or project marketer, then they are working for them, and not for the buyer. A spruikers job is to offload stock to buyers, regardless of the quality of the property, and regardless of whether it is suitable to the buyer. They don’t have a vested interest to give you sound advice.
A point of difference with buyers agents is how we are paid. We are paid direct by the client we are acting for. We are unbiased, independent and work in the best interest of the buyer (or client) and no one else.
What do savvy investors buy?
We never buy new property for our clients because we know that established properties achieve the greatest capital growth over the medium to long term. When buying in well established suburbs you have infrastructure, you have transport, you have employment hubs, you have all the amenities that people desire. More importantly, you have direct comparable’s (i.e. history of property sales in that particular area)
A final point to make is this. Negative gearing is only a taxation deduction that is available for anyone who invests in income-producing assets. It never has been and never will be a sound investment strategy.
Ben Plohl - Founder & Director
**All information published has been collated and prepared in good faith. No representation is given or implied as to its accuracy or interpretation. Please ensure you rely on your own research before making any investment decisions**