Greens Treasury spokesperson, Senator Peter Whish-Wilson, has reiterated calls for investment property to be treated as a financial product in the wake of the 4 Corners report on the state of the housing market in Australia.
Senator Whish-Wilson said, “Australia’s housing market is a debt-fuelled bubble driven primarily by tax breaks to investors. This is distorting the entire economy, creating enormous financial risk, and pushing the price of housing out of the reach of young people.
“And, bizarrely, investment properties are not considered a financial product under Corporations law.
“The FOFA laws that ban conflicted remuneration and that require consideration of the best interests of customers do not apply to the selling of mortgages for an investment property.
“This is absurd. More than half a trillion dollars is owed by property investors yet there is no requirement for advise on the purchase of properties to consider the interests of the customer.
“Last night’s 4 Corners illustrated the predatory behaviour of some mortgage brokers who are paid on commission and are talking people into buying houses that they can’t afford. At no point did these mortgage brokers or the banks that lent the money consider if an investment property was in the best interests of these people.
“The Greens want to bring investment properties under that banner of FOFA. We will look for opportunities to amend the Corporations Act so that real property is considered a financial product, other than for owner-occupancy.
“I also want to congratulate 4 Corners on helping bring about a fair outcome for Ms Carlene Stafford. Ms Stafford was, as a 64 year old single woman of modest means, cold-called by a mortgage broker and then lent $445,000 by ANZ for an investment property.
“I raised Ms Stafford’s case at the May Senate Estimates and asked if this was an example of predatory lending. I’m glad that ANZ seem to have admitted that this is the case and have gone some way to rectifying her situation.
“But it should not take have taken the efforts of a Federal Senator and media outlets to fix this problem," he concluded.