While Matt and Peter purchased their properties as individual investors, some people with self-managed super funds (SMSFs) are also tempted into these kinds of real estate investment, and others are even encouraged to set up an SMSF to buy.

Australian Securities and Investment Commission commissioner Danielle Press says putting all your retirement eggs in the one basket of residential property is very risky.

"We know that property prices go up and they go down, we know that superannuation should be a diversified portfolio, so across a spread of different assets, and if you're holding a single asset in your retirement fund then you are exposing yourself to significant risk," she warns.

This is one reason why ASIC has taken legal action against property investment advice firms to restrain them from encouraging people to invest through setting up SMSFs.

Another reason why ASIC has targeted this practice is that it is one of the few areas where these firms can actually breach the law, because many of their activities are beyond regulation.

That is because real estate is not defined as a financial product in the Corporations Act that ASIC enforces, meaning that virtually anyone can provide advice about it without requiring an Australian Financial Services Licence.

"The financial advice sector is regulated by ASIC, so we are looking very closely at the advice that's given, we're monitoring that, and we ensure that licensees are reputable — or try to ensure that licensees are reputable," Ms Press explains.