The Perth CBD was one of Terry Ryder’s dirty dozen, the areas not to invest in. He said an oversupply of apartments would take some time to work there way through the market. Picture: Sean Middleton.

Analyst Terry Ryder of Hotspotting said the list was dominated by locations which were in decline mostly because of a change in the resources sector coupled with a major increase in new dwelling supply.

Here are Terry Ryder’s dirty dozen in alphabetical order;

EMERALD, QLD

“There has been some improvement in the Emerald market but it remains a bad place to buy,’’ he said.

Vacancies are around 6 per cent and sales volumes are below three years ago. Two years ago, the median house price was $435,000, today it is $290,000.

Emerald still has a way to go before it reaches its previous highs. Picture: Jodie Richter.Source:News Limited

GLADSTONE,QLD

“Recent signs of improvement in Gladstone provided false hope for investors there,’’ he said.

The vacancy rate dropped to 5 per cent earlier this year but is back up to about 8.5 per cent.

The construction phase for the three LNG facilities which created Gladstone’s boom is drawing to a close and thousands of workers will leave in search of new work elsewhere.

Gladstone is still dealing with an oversupply of new dwellings.Source:News Corp Australia

KAMBALDA, WA

“The twin towns of Kambalda East and Kambalda West once had pretensions of becoming a mining boom locale, but now have numbers that make risk-taking investors shudder.’’

In Kambalda West, for the past five years the median house price dropped about 3.8 per cent annually to be now $146,000. The vacancy rate is 19 per cent.

KARRATHA, WA

“Karratha has arguably the weakest property market in the nation,’’ Mr Ryder said.

All suburbs have recorded median price drops well above 20 per cent in the past year. Vacancies are about 6 per cent.

MACKAY, QLD

When the coal mining industry was booming in 2012, about 500 dwellings sold every quarter in the past year, it has struggled to achieve half that.

Vacancies are between 6 per cent and eight per cent.

MORANBAH and the BOWEN BASIN, QLD

“Moranbah is Australia’s greatest example of a boom, bust scenario,’’ Mr Ryder said.

Until 2012, it lead the country for long-term price growth, averaging 30 per cent a year over 10 years. Its median price reached $750,000 and rents were about $1800 a week.

Mining companies baulked at the high rents and a move to fly in fly out workforces and temporary workers camps meant vacancies rose sharply. The median was now $200,000.

Terry Ryder said Mackay could improve and eventually come off his dirty dozen list. Picture: Rob Maccoll.Source:News Limited

MOUNT ISA, QLD

“Mount Isa’s property market continues to shrink,’’ Mr Ryder said.

But he said the property market has dropped alarmingly since early in 2013. While the median house price remained high, around $595,000, three years ago it was nudging $800,000.

PERTH, WA

Sales numbers have halved in two years. Vacancies are 6.4 per cent. A lot of the issues are as a result of new apartments, according to Mr Ryder.

He believes more inner city apartment markets will make it onto his dirty dozen list in the future.

“There is a number of our major cities building too many apartments at a time when demand may be weakening,’ he said.

“The Perth market has been in decline for three years at the same time they have been building lots of new apartments.

Moranbah underwent a flurry of development a few years ago, but then the workforce moved more toward fly in fly out workers. Picture: Robyne Cuerel.Source:News Limited

PORT HEDLAND, WA

“This market, comprising Port Hedland and neighbouring South Hedland, has been in steep decline for the past three years.’’

Three years ago, Port Hedland had a median house price of $1.3 million, today it is $880,000.

SURAT BASIN, QLD

“This is another area over-targeted by developers. Towns like Miles, Chinchilla and Roma boomed – until oversupply killed their markets.’’

Vacancies are 41 per cent, according to the latest SQM Research figures.

WHYALLA, SA

“Whyalla has been one of South Australia’s best capital growth performers long-term,’’ Mr Ryder said.

But values have dropped dramatically, and are back to the levels of five years ago.

Mr Ryder said the one thing the majority of these areas had in common was an oversupply of property.

“Most of the locations are resources located and in most cases the problem is not so much a down turn in the resources sector, because quite often that is the way it is described, it is because developers built too many dwellings in anticipation of strong demand.

He said many in these towns moved to fly in fly out workforces so they weren’t renting or buying local properties.

But he said all hope was not lost for those who already owned investment properties in these towns or suburbs.

His advice? Hold on if you can.

“As this year progresses we might see some of these locations, maybe Mackay for example start to turn around even possibly Gladstone.’’

“It is only a loss if you sell and if you do sell now in those locations you certainly will take a loss, but if you are able to hold on and ride out the rough period there are prospects in most of the locations for a better future.

Terry Ryder has labelled Gladstone the number one industrial muscle town in Australia.Source:News Corp Australia

“Gladstone has got a huge future as far as I am concerned, it is the number one industrial muscle town in Australia. It’s massive but the only problem is developers built too much new stock and it doesn’t matter what the growth drivers are, if developers build too many new dwellings you are going to have a declining market but its future is very strong.

“Wyalla in South Australia also has a very strong future.

“They will always have these high peaks and deep troughs. That is the nature of them and if you are going to buy in these places you need to be aware of that and far too many people have bought in these places, not really suited to them. People who can’t sleep at night because the investment is performing poorly at the moment.

“You really need to have to have the right temperament you need to understand exactly the sort of market you are buying into and you need to be the sort of person who can handle those rough periods.’’