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Two tier real estate markets in Queensland - This Report goes back to 1998 when we were warning ASIC of this
with our own detailed reports on the Mechanics of Two Tiered marketing and released by main stream media.
TWO TIERED SCAM involving Banks in 1998.
Report on an investigation conducted for the Queensland Office of Fair Trading.
Two tier markets can be defined as those where the one property can at the same time have two wildly divergent values, depending on how and to whom property is sold. What are referred to as two tier markets have a high price tier which is achieved when specialist organisations and techniques are used to market properties to persons normally residing somewhere remote from the market.
The argument that valuers are responsible for the fiction of a two tier market is disproved by the so called third tier market – where investors who dispose of their properties must do so at a loss in the normal market while marketing organisations retain the ability to remarket those same properties at the high second tier of pricing.............. A classic SCAM and then cover up the evidence by creating the third tier..
The existence of two widely separated price tiers introduces a fundamental flaw into the projections of capital appreciation shown to potential purchasers by marketing organisations which means that very few investors can expect a positive growth in the value of their investment even over extended time periods.
The success of negative gearing marketing techniques has meant that much new development product is being built specifically for this market.
This may build significant distortions into real estate markets, worsening boom-bust cycles and increasing recovery periods. There is a need also for more research into the potential social consequences of excess construction of rental housing stock, often in unsuitable locations.
