THE COMING RIP-OFF BOOM
S.E. Queensland scams set to soar.
by Neil Jenman
Australia is full of rogues; and rip-offs happen in every area. But there are more rogues and more rip-offs in South-East Queensland than anywhere in the country; perhaps the world.
There is something about Queensland that seems to attract villains and, at the same time, seduce their victims. Perhaps it's the weather, the easy lifestyle or the nature of the fun-loving people that makes victims feel safe in Queensland. Who knows?
Whatever the reason, one thing's for sure – a boom is coming for South-East Queensland, a boom in real estate rip-offs.
As these words are written (mid-2007), tens of thousands of Australians – mostly the most honest and decent among us – have no idea that they are going to become the next generation of victims of Queensland property scams. Their families will be the face of sadness on the TV shows and in the newspaper investigations in the years ahead.
From 2010 to 2015, we will look back on this period (2007 – 2010) as the years when the rip-offs boomed to new heights as skulduggery sank to new lows in South-East Queensland.
Whether it be two-tier marketing, over-priced properties, rental guarantees, house/land package deals, secure-your-retirement programs, wealth-creation schemes (or whatever name it comes under), Queensland's spruikers have a slick scam to suit everyone.
And, from yesterday, those scams are going to soar. The spruikers will be hiring more con sultants (con artists) to cope with the created demand for their over-priced properties.
And the con sultants will now be using a powerfully persuasive pitch to stitch up thousands of victims. To trusting and decent investors (who will later be cruelly dubbed greedy or gullible) the pitch will be almost irresistible. "Queensland is set to boom. It's official. Look at the headlines."
As The Courier-Mail reported yesterday (in a page three article), "Brisbane looks set for a fresh housing boom, with prices tipped to soar 22 per cent in the next three years."
And it's not just Brisbane, but "the entire southeast" (which includes the Sunshine Coast, the Gold Coast and, of course, the latest scam centres west of Brisbane – the Ipswich corridor).
The boom headlines – which will be making the spruikers salivate – emanate from a report released by economic forecasters, BIS Shrapnel.
The author of the report is Angie Zigomanis, a man who, without knowing it, has become the new pin-up poster boy for spruikers.
To be sure, Angie Zigomanis, is NOT a spruiker, nor has he got any ties to spruikers (at least from his perspective). He's merely a researcher, an intellectual who has prepared a report based on his research.
Is he right? Will prices in South-East Queensland really soar by 22 per cent in the next three years? Maybe. Maybe not. No-one really knows for sure.
But one thing that is for sure is this: In the hands of spruikers, Angie's report is a lethal weapon. He will, unwittingly, become part of their sales pitch.
Yesterday's news story will already have found its way into the sales folders of the property investment con sultants.
So, why, you may ask, is all this so bad?
If property prices in South-East Queensland are set to boom as predicted, then surely it's a good idea to buy an investment property in South-East Queensland?
Er, no, not at all.
Investing success – especially in the most scam-infested area in Australia – depends on two factors – from whom you buy and how you buy.
If you buy from a spruiking company, you will pay at least 20 per cent (and perhaps as much as 30 per cent) more than the property is really worth.
In short, if you buy in 2007, you will be paying 2010 prices (assuming Angie Zigomanis is right and prices do increase by 22 per cent).
If prices do not increase by 22 per cent – or if they remain stagnant or fall – you may have to wait another five (or ten?!) years for your property to be worth the price you paid.
This is exactly what happened to thousands of investors in the 1990s. It's happening again in the 2000s and, due to this "boom forecast", it's going to get even worse.
Therefore the message should be clear – DO NOT BUY PROPERTY FROM SPRUIKERS. If you don't know how to identify a spruiker, you're probably dealing with a spruiker. Don't buy.
If you really want to invest in property, then buy from a normal real estate agent.
Yes, as dodgy as many may be, when it comes to market prices, your typical agent usually sells typical real estate for close to its true value (if anything, often a little below the true value).
Be careful because many of the big name real estate firms have set up what they call "investment divisions" which, in reality, are just sham fronts for spruikers.
Often the best investments are bought from the worst agents.
This may seem ridiculous but there's a lot of truth in it. A savvy investor once said, "If agents have flies in their window, they're likely to have some good deals. But, if the flies are dead, they're likely to have some great bargains."
Whatever you do, stay away from spruikers (all of them!). If you want to invest, go to any typical real estate office. When you find something you think may be worth buying, don't sign anything (no matter what!!) until you get independent legal advice and an independent valuation.
Remember, there are more rogues and more rip-offs in South-East Queensland than anywhere in the country.
I don't know if a property boom is coming for South-East Queensland. But I do know, for sure, that a rip-off boom is coming.
And that's one boom you must avoid.