Use Local Sales and Rental Data To Spot Over-Hyped Projects

Developer incentives and rental guarantees are often a red flag that a project is struggling and prices are propped up. The safest way to tell if a project is over‑hyped is to ignore the brochure and compare your contract price and promised rent to recent local sales and actual rents for similar properties in the same suburb or neighbouring streets.

Here’s how to do decision‑grade due diligence in under a week.

Always test glossy project marketing against real local sales and rental evidence.

1. Start with local sales: is the price already stretched?

Your first job is to see if you’re paying above the local ceiling.

Ask an independent valuer, broker or buyer’s agent for:

• The last 5–10 sales for comparable properties within ~1–2km.
• Size (internal sqm), parking, outlook and level/position.
• Whether they were brand new, near‑new or older stock.

Then do two simple checks.

A. Price per square metre

Work out contract price ÷ internal sqm.

Example

• Your 2‑bed unit: $980,000, 80sqm → $12,250/sqm.
• Similar established 2‑beds nearby: $880,000, 82sqm → ~$10,730/sqm.

You’re paying ~14% above recent comparable stock.

If brand‑new stock is more than ~10–15% above good established comparables without any real quality difference, you’re probably paying for marketing and incentives, not intrinsic value.

B. Contract price vs valuer mindset

Bank valuers don’t care what you were promised; they care what similar stock is trading for today.

Where we see trouble:

1. Contract signed 12–24 months ago at boom prices.
2. Market has cooled or rates have risen.
3. Valuation comes in 5–15% under contract.

You must then either tip in more cash, restructure loans, or risk losing your deposit. This is exactly the dynamic explored in off‑market contexts in [/insights/finance-traps-dover-heights-off-market-pre-market-deals].

If your price is already at the very top of the range before counting incentives, treat that as a warning.