Chinese-based agency Macland is advertising a 4 per cent guarantee over three years for Cumberland Green apartments in Rouse Hill. Buyers also go into a draw to win a new car.

So effective was the incentive, Chinese-based group Property Investors Alliance (PIA) said some smaller agents were copying their guarantee ad campaigns on Gumtree to attract investors. PIA is offering 3.2 to 3.8 per cent guarantees over three years.

While sellers, whether agents or developers, have used rental guarantees in good projects, traditionally they have been used to entice buyers to buy properties at a premium to their actual value. They use part of the profit to make up the shortfall between the rent the property generates and the amount they promised investors.

APRA's curbs to investor lending have also slowed apartment sales.

Growland's Victoria Square. Scharp

"Since the regulatory changes took place earlier this year, investor sales have dropped significantly, which will likely result in reduced rental supply and push prices up even higher," Growland chief executive Ronald Chan said.

"Growland is happy to be able to offer an incentive to bring investors back to the residential market, ultimately benefiting Melbourne renters."

Apartment values, even in Sydney, have fallen between 3 to 5 per cent in the past year, Macland chief executive Leo Jia said.


"Sales are slow, investors have declined, so you can only imagine the developer will have to employ every marketing tactic to sell. Many of them need to just meet presales to get their projects underway, and it's sometimes down to the last say, ten units."

As such guarantees have risen across the eastern seaboard, PIA chief executive Justin Wang added. "If it's more than 4 per cent in Sydney and the property is not in a regional area, which usually gets a higher rental yield, I would be concerned."

SQM Research offers a benchmark of a maximum of 4.5 per cent for Sydney CBD, 6 per cent for Brisbane and 4 per cent in Melbourne. The further away from the CBD, and therefore the cheaper the apartment prices, yields rise.

Buyers should also check the background of the group underwriting the guarantee, The Agency's Matt Lahood said.

"If the group is not there in four years, a six year guarantee is useless," he said.

"Get an independent assessment of the yield. You need to know what happens after the two years of guarantee for the rest of the 30 years you are holding the property."

But online apartment marketer Investorist's Jon Ellis says guarantees do not mean developers are trying to flog off poor-value units. They use it throughout the sales campaign even for good projects.

"Many developers do use this instrument at the start of their developments, it is especially prevalent with developers who sell offshore and via financial planning companies," he said.

"This buyer incentive is probably less known publicly as it is not commonly promoted to direct consumers."

"However when only investors are targeted this is a commonly used instrument."

Take the Defence Housing Authority, which guarantees investors a rental income but as a government-backed program, it does not seek to make profits above market value of dwellings.