It's a dirty secret for many, but there are few more effective ways of generating a negative return on your investment than by buying a property "off the plan" from a developer. This largely stems from the fact that developers exist for the pure purpose of generating a profit and will generally do whatever it takes to ensure that they receive the maximum return on their investment.

Leading developers, such as Mirvac or Central Equity will often tempt investors with short-term "rental guarantees", which, when coupled with stamp duty concessions served to create an artificially high return. In many inner-city developments, as much as half of the available stock will be sold to wealthy, yet unsophisticated foreign investors, while the remaining half needs to be sold to owner-occupiers or local punters.