Just because a location is enjoying an abundance in property doesn’t mean it is a good deal. Investors should analyze whether these locations are triggering an oversupply which will eventually affect property values. Market analyst Terry Rider breaks down the top 10 locations you should be avoiding when investing in property.

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Inner City Brisbane, Queensland. Properties located near the Central Business District have often been the investment of choice, as it promotes safety and accessibility. Despite these, Bribane’s Inner City has historically underperformed, and ongoing developments are triggering an oversupply within the next 5 years.

Emerald, Queensland. The coal industry is on a downward trend and this is drastically affecting Emerald’s growth. Property values are to be negatively impacted for as long this is not addressed.

Gladstone, Queensland. Properties have emerged in the late 2012 to the early 2013, causing the vacancy rate to jump to an alarming 8%.

Gracemere, Queensland. Hotspotting has favoured Gladstone that residential building approvals have doubled for 2013, creating warning signs for a property oversupply.

Hunter Region, New South Wales. Property demand has been affected also because of the drop in the coal industry.

Mackay, Queensland. Another market affected by the coal industry, Mackay is currently experiencing a decline in property. Despite these, it has bounced back numerous times and is expected to do so again in the future.

Inner City Melbourne, Victoria. Ryder refers to Melbourne’s Inner City as a market experiencing “toxic growth” because of its high vacancy rates and oversupply in property.

Moranbah, Queensland. Moranbah is a market to avoid with its high vacancy rate of 10%.

Inner City Perth, Western Australia. High developer activity in the CBD is a sign to be aware of, although oversupply issues in Perth are not as alarming as Melbourne or Brisbane.

Port Hedland, Western Australia. With the mining boom fading into a distant memory, properties take 5 months to sell in this market.

Read more about this on the Property Observer website.

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Dorian Traill is the current Director of Grand Capital Finance Group and Fountain Property Group. He specialize in home loans for people as well as helping them build wealth through quality investment properties that ultimately lead to long term financial freedom.