Property Club investors in Australia are facing losses of as much as $300,000

IT claims to be Australia’s largest wealth creation organisation, but investors are facing losses of as much as $300,000 on buys made via the Property Club.

At a loss ... Nick and Andrea Foran, pictured with their children Bronte, 14, and Isaac, 11, were astounded that the Property Club did not provide more help. Picture: Peter Lorimer.

IT claims to be Australia’s largest wealth creation organisation, but some investors facing losses of as much as $300,000 on buys made via the Property Club claim its mantra — “we alone protect buyers” — is a lie.

The club promotes itself as having made 10 times more millionaires than Oz Lotto by screening out 90 per cent of the real-estate market then negotiating lower prices and special protections, with risks further minimised through expert help from the “world’s best property brains”.

However, today News Corp Australia reveals claims of a starkly different experience of negative equity and next to no help, as people from across Australia who were drawn in by the spin speak out. The investors, who are from Queensland, NSW, the ACT and South Australia, also say they are going to fight for compensation.

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Left high and dry ... the Foran family of Newcastle were among those who invested through the club only to end up in the red. Picture by Peter Lorimer.

In 2010 the Property Club tipped the buyers into house and land packages in Craigieburn in outer Melbourne on the promise of quick construction, strong capital growth and healthy rental yields. Instead the builder went bust and investors say they had to find a replacement. Electricians owed money by the original builder cut cables and plumbers poured concrete into pipes. Walls were sprayed with graffiti and windows smashed. One house was not even being built to the design — a bedroom and walk-in-wardrobe had gone missing and the double garage was a single.

It took a mountain of extra money to finally get their properties finished — in 2015. All the while they were paying interest on loans and, in at least one case, interest on a line of credit set up on the club’s advice to cover a loan.

To make matters worse, rents failed to match club projections and the market value of the homes has proven to be nothing like what was paid.

“Do they protect the buyers? Not a hope in hell,” said Nick Foran, of Newcastle, who estimates his family is about $150,000 behind.

Canberra’s Paul Brealey believes he is more than $120,000 down: “It has affected my health and robbed me of any chance of financial independence in retirement.”

The Gold Coast’s Roz Flint, who puts her losses at $300,000, said: “You think you are doing the right thing (but) it’s the worst thing you could ever do.”

Phil Selfe, of Barmera northwest of Adelaide — in the red by about $200,000 — said: “I want their blood.”

The club said “there has been a great deal of involvement by the club in assisting the buyers who have been affected by a builder who failed. The builder had no association with the Property Club”.