Mining Town Losses
For anyone that has read my book “The Complete Guide to Property Investing in Australia” or has attended one of my property workshops, you will know that I consistently advise people not to buy property in regional or mining towns. However, some people do not heed the advice and get lured in to speculating on these properties.
Just as I had advised, there has been a significant drop in property values in some of the regional and mining towns after the slowdown in mining.
The story of Kate and Matt Moloney (not my clients)
This young couple were actually crowned “Investors of the Year” by Your Investment Property Magazine in 2012. They amassed 16 properties in mining towns across Australia. Since the downtown they have lost over $3.5 million and are facing bankruptcy. In articles and interviews of the couple recently, Kate herself refers to suicide, depression and anti-depressant tablets.
Read the follow and try not to gasp for air at some of the losses…………
A three bedroom 1960s home in the town centre, once commanded rent of $1,600 per week and put on the market for $1.1 million was finally sold to a first homebuyer in October for $235,000.
That is a loss of $865,000
One poor investor paid $589,000 for a house in Moranbah as the boom was still climbing to its peak in September 2011. It was later repossessed and sold through mortgagee auction in November for just $118,000.
That is a loss of $471,000
While these stories are all very sad we can learn a lot from this. Don’t try and speculate and out do the market. Just build new within a reasonable distance to a capital city and wait for the market waves to build your wealth.