Our latest episode of Market Watch was supposed to be about housing supply, but quickly led to a discussion of scams.
Not sure how the two are linked? Think back to May 2022 when the Albanese Government was elected to parliament. Back then, Treasurer Jim Chalmers declared the Federal Government would deliver 1,000,000 new dwellings by May 2027.
It was a stupid promise to make but Chalmers obviously thought we could pretty easily get there, as we were already fairly close to the target of building 200,000 dwellings per year before COVID (2016 to 2019).
Forgive my cynicism, but just goes to show how much Chalmers knows about the property industry. Construction has been falling off a cliff ever since 2019. But that didn’t stop him having another crack at the big promise.
You can watch our review and insights on what the government is doing to influence supply by clicking here.
During the Federal Budget in May this year, Chalmers set the target of 1,200,000 dwellings by 2029 – that means 240,000 properties need to be built per year for the next five years. Australia has never produced that many properties, so the target is looking like the ravings of a desperate or clueless individual.
But . . just smells like a scam to me.
Why are we interested in the target?
If we’re continuing to increase the population through natural births as well as migration, and we can’t house the people who are here already then property prices are going nowhere but up . .quickly.
We also want to know where these new dwellings are planned to be built, because if there’s going to be a massive influx of new apartments in an area, you should want to know where this will happen as it might impact property you already own, or it should influence where you will buy next.
Other scams : – )
In keeping with the big Federal Government scam, we covered off the following top seven other scams that trap buyers including how to spot the scam, and how to avoid them. Watch the podcast here.
Scams to avoid
- Misuse of median price data to imply a market is growing quickly.
- Use of VIP and upfront payment programs to lock buyers into their model – often pays a referring advisor as well.
- Use of 80% LVR scenario to show a property is positive cash flow. Very misleading when a person has a PPOR with non deductible debt.
- Club – gets clients to find new buyers and pay them so brainwashes clients into thinking they’re helping friends when it just means more people are being ripped off or loaded into poorly performing properties.
- $30K education and mentoring programs – there goes your first deposit, and is pitched to those who don’t have the capacity to do what the course is teaching.
- Promoting cheap units and townhouses in cities to out of state buyers who think they look cheap compared to local prices.
- Pushing depreciation and tax benefits as the reason to buy. Not mentioning part of it is paid back when you sell.
- Bonus scam – the latest NDIS property rip off . . check out the story published by the AFR – Investors ‘hung out to dry’ as NDIS housing schemes fail
About the author
Debra Beck-Mewing is the Editor of the Property Portfolio Magazine and CEO of The Property Frontline. She has more than 20 years’ experience in buying property Australia-wide and has extensive experience in helping buyers use a range of strategies including renovating, granny flats, sub-division and development. Debra is a skilled property strategist, and a master in identifying tailored opportunities, homes and sourcing properties that have multiple uses. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics. She is also an author, podcast host, and participates on numerous committees including the Property Owners’ Association.
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Disclaimer – This information is of a general nature only and does not constitute professional advice. We strongly recommend you seek your own professional advice in relation to your particular circumstances.
