Investors caught out as market goes from boom to bust
GLADSTONE'S boom-bust nature has caught out unsuspecting property investors, with more tales emerging of losses made in the local market.
Fairfax Media reports that during the boom two years ago, mum and dad investors like Nick Small, lured by brokers promising rivers of gold, wanted in.
Single father-of-three Nick was told if he bought a three-bedroom unit for about $550,000, he'd be getting $1000 a week rent and could expect to make about $6000 a year profit.
That was the case for about a year from mid-2011.
But a local real estate agency estimates about 3500 homes were being built in the region between 2011 and 2013, sending the town on a runaway path to over-supply.
By the time Nick got his keys last month, there was a glut of properties and workers had moved into newly-built camps or were choosing to fly in and fly out.
Nick's property is empty, and the best he can hope for is $500 a week rent.
If he sold, he'd lose at least $50,000 on his original investment just 18 months ago.
The investment was supposed to be Nick's ticket to semi-retirement, but his plans have been put on hold until he can sell.
The Real Estate Institute Queensland says 4.6 per cent of rental properties in Gladstone were vacant in June, the second highest level in the state.
Read the full story here.