Real estate veteran Tom Panos has raised concerns some Sydney buyers may have been paying much more than what a property was worth over fears one of Australia’s biggest mortgage fraud syndicates distorted the market.
His concern follows fresh arrests linked to the alleged Penthouse Syndicate, which police claim paid up to 50 per cent above market value for some homes as part of a scheme that ultimately defrauded banks of more than $600million.
Three more people, including the director of a Bankstown accounting firm and two accountants, were charged last week.
NSW Police allege the inflated transactions became recorded sales that could have influenced future valuations, asking prices and buyer expectations.
They have yet to identify which suburbs may have been affected although it is believed the syndicate allegedly targeting well-heeled suburbs in Sydney‘s east.
‘What if some of the property growth we’ve seen in certain Sydney suburbs wasn’t entirely real?’ Mr Panos asked.
He explained how property valuations rely on past sales data, and that false values could have repercussions for homeowners in affected suburbs.
‘Why would someone deliberately overpay? Because, according to police, the bank would lend against the inflated contract price,’ Mr Panos said.
Real estate veteran Tom Panos has raised fears the property price boom in Sydney could have been distorted by one of Australia’s biggest mortgage fraud syndicates
‘A separate deed of rebate would then allegedly return some of that money back to the buyer, but that rebate wasn’t disclosed to the bank.
‘Imagine a home that’s worth $2million on paper, it sells for $3million. The bank lends against the higher figure, and some of that extra money is allegedly redirected back behind the scenes.
‘That recorded sale goes on to CoreLogic at $3million, that sale becomes evidence, the agent uses it at the next listing presentation, the valuer sees it and property websites absorb it.
‘The neighbour expects it. Then buyers are told that sold for that much, that’s what they’re going for.
‘Then another property sells using the same inflated result as a comparable, and suddenly you’ve got the… false pricing, starting to produce real consequences.’
Mr Panos said one manipulated transaction could distort values along an entire street, while several in the same pocket could affect the median sale price for the whole area.
‘It raises a very uncomfortable question: how much of Sydney’s extraordinary growth was created by genuine buyers, and how much was supported by contaminated sales moving through the system?’ he said.
‘Homeowners could be relying on values that never really existed.’
Mr Panos’ concern follows fresh arrests linked to the alleged Penthouse Syndicate, which police claim paid up to 50 per cent above market value for some homes as part of a scheme that ultimately defrauded banks of more than $600million
The Penthouse Syndicate, allegedly led by Shanghai-born Bing ‘Michael’ Li, is accused of building a Sydney property empire worth tens of millions through a network of corrupt solicitors, real estate agents, mortgage brokers and other facilitators.
The group allegedly purchased properties across metropolitan Sydney, primarily targeting the city’s affluent eastern suburbs.
Last week, police alleged Australian banks had been defrauded of more than $600million.
The latest arrests bring the total number of people charged under Strike Force Myddleton to 33, as detectives from the Financial Crimes Squad continue to investigate the alleged multimillion-dollar fraud and money laundering network.
Police initially uncovered allegations the syndicate was using stolen personal information to apply for loans through various financial companies to purchase luxury ‘ghost cars’ that did not exist.
Further investigations allegedly revealed a much broader operation involving large-scale personal, business and home loan fraud targeting multiple financial institutions.
The NSW Crime Commission has restrained $95million in assets to date.
Financial Crimes Squad Commander Detective Superintendent Gordon Arbinja said the alleged conduct shows a deliberate and coordinated effort to exploit loan systems, misuse personal information, and conceal the proceeds of crime through professional channels.
Police allege Shanghai-born Bing ‘Michael’ Li (pictured) was the ringleader of the Penthouse syndicate
‘These arrests demonstrate the sophistication of the syndicate and the lengths it allegedly went to obtain fraudulent loans and launder millions of dollars,’ he said in a statement.
‘Our investigators, supported by partner agencies, will continue to pursue every individual who plays a role in facilitating organised financial crime.’
