Gladstone losses is a warning about regional market investing

A property that was purchased in Gladstone for $250,000 in 2009 and recently sold for $125,000. This is a scary reminder of the risks of investing in regional markets. They are good while they are good but when they turn, they can be very scary and can create massive losses. The fact that they are driven generally by one type of industry – in the case of Gladstone it is mining – when that job slows down, there will not be as many tenants hence there will be an excess of supply and this means price drops.

I have been encouraging people to avoid investing in regional markets for years, long before the mining slow down. This is another example why.