Julian Fadini: Property market is heating up and so are the scams - What to be wary of

Property market heating up and so are scams:  Julian Fadini is warning Australians to be careful

As Australia's property market begins to warm up again, leading property investment expert Julian Fadini, founder and CEO of PRPTY360, is urging buyers to stay alert - warning that a surge in market activity is also triggering a fresh wave of scams, misleading claims and dangerous investment traps.

"There are excellent opportunities right now and we know that the property market is only going to keep going up and in some areas it will achieve rocket-ship growth due to falling interest rates, but there are also more scams than ever. Scammers are getting more sophisticated and bolder in their tactics. Buyers need to be careful," Fadini said.

"We are already starting to see some concerning tactics being used in the market to lure in naïve buyers.  While the real estate sector is somewhat regulated, clever marketers are finding ways to massage claims and attract unsuspecting buyers."

With interest rates tipped to fall and confidence returning to key markets, Fadini explained spruikers are returning in force and many are targeting younger or first-time investors with promises that are simply too good to be true.

Fadini outlines some of the strategies being used by property marketers, especially in the area of off-the-plan apartments. 

Off-the-plan claims are one of the biggest red flags

One of the most common traps, according to Fadini, is the renewed push around off-the-plan apartment sales. While these schemes once flooded the Gold Coast, Fadini explained they are now appearing in multiple regions nationwide.

"We are seeing agents and developers using phrases like 'the price of the next release is going up, so you're already making money if you buy now.' That is a complete red flag," he said.

"There is no way to determine an apartment's real value three or four years in advance. That claim has no basis in reality."

He warned that relying on staged price increases between development releases is misleading and ignores market dynamics.

"What happens if, in three years, multiple projects have also been built in the same street or suburb? You could suddenly have 100 new apartments available and your apartment may not be worth what you paid for it. In fact, it could be worth less. We are seeing this happen in multiple locations around the country."

Sunset clauses are another rising risk

Fadini is also concerned about the number of projects where developers invoke sunset clauses,  effectively cancelling contracts after holding buyer deposits for years, only to resell the same property at a higher price.

"We're seeing projects where the original buyers lost two years of growth potential. They would have been far better off investing in established property from the outset," he said.

Guaranteed rental returns

"Many projects offer guaranteed rental returns and often this is a key aspect of the financial benefit of purchasing," Fadini said. 

"In some cases the rental return is valid as it is based on area projections however, if the return is not aligned with an area's average rental yield and only calculated to lure in investors, then this is a problem. 

"It means that when the guaranteed period is over, the rent will reduce to normal market levels.  In addition, fabricated high rental yields can also mask falling real property values or property quality and construction issues."

Scams are evolving - but so should buyers

While scams were once easier to spot, Fadini said today's bad actors are far more convincing, using professional marketing, staged release pricing models and artificially generated hype to pressure buyers into quick decisions.

"The Gold Coast was a hotspot for this for years, but now it is happening everywhere. The tactics are slicker, the pitches are smarter and the risks are much higher for those who don't do their due diligence," Fadini said.

Buyers need to think long-term, not just buy fast

Fadini believes property remains one of the most powerful ways to grow long-term wealth but only when buyers are equipped with the right advice and avoid emotionally driven decisions.

"At PRPTY360, we start with financial strategy, not property listings. We work with clients to understand their borrowing power, clarify their long-term goals and only then help them identify the right properties in the right markets," he said.

"99 percent of the properties we recommend to buyers are free-hold house and land packages. Land is the reason properties usually go up.   Investors need to remember this."

About Julian Fadini and PRPTY360

Julian Fadini is a licensed real estate agent, qualified financial planner, mortgage broker and property investment adviser. He founded PRPTY360 to deliver honest, strategic advice after seeing a lack of care in the banking sector. Based in Sydney, PRPTY360 is a specialist property investment advisory and buyers' agency focused on education, empowerment and long-term results. The firm partners with financial planners, brokers and accountants to provide tailored strategies, not generic solutions. With over 300 successful clients and a reputation built on results, PRPTY360 supports everyday Australians to grow wealth through smart, structured property investment.

www.prpty360.com.au