I have previously spoken about my annoyance with the liberties available to the real estate industry because their agents are do not have to conform with the Australian Financial Services Licencing Act. I find this a bizarre legal exception, most especially because the housing market represents $4 trillion of national wealth versus $1.2 trillion in shares and roughly $1.2 trillion in various forms of deposits.

So while  your local bank teller has to provide prudent financial disclosure for simply trying to inform you that you might be better off with a 6.5% term deposit over your standard bank account, your local real estate agent can spruik to his or her heart’s content about the virtues of the “never declining” housing market with impunity. The REIA website proudly declares its members exemptions to the AFSL:

Under the Commonwealth’s Financial Services Reform Act (FSRA) 2001, all companies or individuals that provide a financial service must either hold an Australian Financial Services License (AFSL), become authorised by an AFSL holder or qualify for specific ‘relief’ from the regime under an ASIC determination.

The FSRA does not apply to real estate agents in their capacity selling individual real property. It does however include financial services provided in relation to products such as general insurance and managed investment schemes.

Real estate is a sales business so I understand that some “flexibility” with the facts is justifiable. However, after just a few days training, agents can take so many liberties with the largest financial transaction the average Australian will ever make it leaves me incredulous.

But it gets worse, because in many cases it isn’t just the real estate industry providing the “flexibility” in the facts.

It is well known that the print media and the real estate industry have financial partnerships; you wouldn’t get real estate liftouts that are half the size of the Saturday paper if it wasn’t the case. I have no issue with this relationship per se, as long as it is clearly declared by the media outlets and their agents when they are producing content on behalf of the real estate industry. The problem is in many cases it is not. No doubt it is often simply sloppy reporting, but the occurrence is so widespread that it is difficult to not also conclude that some systemic corruption of standards is under way. Either way, it is a disgrace to both industries and an utter embarrassment to regulators for providing a legal framework that allows it to occur.

Following are a very few examples of what I am talking about:

June 14 2008, The Courier — Bucking the home loan trend

Same newspaper different page.

Feb 04 2009 The Australian — Mum ready to go shopping for second home

The memory of her mortgage rate rocketing above 9 per cent last year is not enough to scare Kirsten Friedli away from the property game.

Following the Reserve Bank’s decision yesterday to drop the cash rate 100 basis points to a 45-year-low of 3.25 per cent, Ms Friedli is ready to go shopping for her second home.

Kirsten Friedli works for Dougmal Real estate and has done for 14 years, it is never declared in the article.

Feb 05 2009 — Daily Telegraph — Increased grant “the difference”

Last October, Ms Chenery and her boyfriend Graham Burden had been shopping for a house in the Camden area. Then came the initial incentive to combat the economic crisis – the increase to the first home buyers grant. With $24,000 suddenly on offer for building – up from $7000 – the couple switched to searching for affordable land. Last month they bought a lot in Camden’s Spring Farm estate – one of 17 first-home builders to do so in January.

Emma Chenery worked at Prudential Real estate, it was never declared in the article.

Sept 11 2010 Daily Telegraph — Please help us get a home

One couple who recently employed the personalised campaign are Luke Johnson and Helen Jones, who sent out a one-page notice to unit owners in the Redfern, Alexandria and Newtown area two weeks ago. The couple, who recently became engaged, have been looking for a property for the past 18 months and said they struggled to find an appropriate apartment for under $500,000.

“I know what we want, but anything we want is guaranteed to have a bunch of other people who want it too,” Mr Johnson said.

He said part of the problem was caused by experienced investors.

Luke Johnson works at Nexus Real Estate, it is never declared in the article.

Feb 05 2011 Courier Mail — First home buyers slowly returning to Queensland property market after historical low

Ben Markwell, 23, and Elizabeth Brier-Mills, 22, were among those to buy for the first time at the end of last year.

Mr Markwell said they decided to buy a home at Collingwood Park when they discovered it would not cost much more than renting.

He said the first home buyer’s grant was a great incentive to people their age.

“I think people now in their early 20s are quite interested in property. They are interested in getting their first home,” Mr Markwell said.

At the time of the article Ben Markwell was a property agent for Century 21. It was never declared in the article.

Feb 12 2011 Adelaide Now — Making the first home a reality

Lisa Vallely, who bought a block of land late last year at Northgate to build her first home, says the great Australian dream is still achievable.

“You just have to look at what you can afford and prepare for the worst when budgeting for interest rates,” she says.

Lisa Vallely is an agent at Harcourts, it is never declared in the article.

As you can see these non-disclosed conflicts of interest have been happening for many years in the Australian print media. I am aware of many other examples.

*This piece was originally published at the group blog Macrobusiness. Read the rest of this post here.