The Australian Direct Property Investment Association (ADPIA) has called for direct property fund managers to provide investors with better understanding when it comes to making investment decisions.
ADPIA president Linden Toll said investors have been lulled into a false sense of security, given the strong returns of most investment markets in the past few years.
Speaking at yesterday's ADPIA annual conference, Toll said while investment markets have been kind to investors in the last few years, many have forgotten to factor in risk into the equation.
"It seems that despite what we learnt about markets in the 1980s, we fell again into the comfortable trap of high returns without considering what risks might lie ahead," he said.
"The stories of people losing money on not one - but sometimes three- investment mezzanine funds, should send shudders through everyone looking to secure new investors."
Australian investors have lost around $1 billion in unsecured mezzanine funds in the past 12 months.
"Unfortunately these sad losses to the mostly vulnerable at home investors or those poorly advised leave us with a responsibility that we must now address - education," Toll said.
"It is our responsibility as an association dealing with more than $20 billion of 250,000 Australians hard earned investment and superannuation money, to ensure that all with a dollar to invest do so fully equipped to do so rationally, thoughtfully, and with due consideration of advice."
Toll said it was time to differentiate between solid bricks and mortar property investments and those lending-style propositions loosely described as property.
Education will be the theme of 2007/08 for ADPIA, he said.
