And why smart investors steer clear too…
When it comes to building a strong investment property portfolio, not every property is created equal. Some might look like great opportunities on the surface—new homes, cheap apartments, or regional bargains—but they could be landmines in disguise.
As a buyers agent in Melbourne who helps everyday Australians invest all across the country, I’ve seen investors make costly mistakes by buying & holding the wrong types of properties long-term.
Let me break down the three types of properties I would never hold in my portfolio long-term—and why.
1. Regional Towns Dependent on One Industry
Example: Mining towns, tourism hubs, or defence-reliant regions.
These towns can boom hard… but they can also bust just as fast.
⚠️ Why I Avoid Them:
- High-risk volatility – If that one industry shuts down or slows down, rental demand and property values can crash.
- Low buyer pool – It’s harder to sell or refinance later.
- Banks are cautious – Some lenders apply tighter policies or lower LVRs in these postcodes.
Roxby Downs, SA is a classic example of why mining towns can be risky. An investor who bought at the peak in 2011–2012 for $435K would be sitting on a property now worth just $285K—a $150K loss over 13 years.
Or Moranbah in QLD looked like a goldmine during the mining boom—until it wasn’t. Properties that sold for over $700K in 2012 at the peak dropped to as low as $160K after the slump, wiping out over $500K in value. This is the danger of investing in a town tied almost entirely to one sector.
Safer alternative? Look for towns with diverse economies, strong infrastructure pipelines, and multiple employment drivers.
2. High-Density Apartments in Oversupplied Areas
Think: CBD towers, crowded city-fringe blocks, and cookie-cutter units.
If there are hundreds of identical apartments in your suburb, you’re not investing—you’re competing in a race to the bottom.
⚠️ Why I Avoid Them:
- Poor capital growth – Supply outpaces demand, pushing prices sideways or down.
- High body corporate fees – These eat into your cash flow and can rise unexpectedly.
- Investor-heavy buildings – This can lead to poor management, higher vacancy, and short-stay issues.
The data shows: Many CBD apartments in cities like Melbourne, Sydney and Brisbane have underperformed for the past 10 years, while houses in the same suburbs grew significantly.
Smarter choice? Look for boutique unit blocks with fewer units.
3. New House & Land Packages in Oversupplied Estates
Especially those in outer-ring suburbs with hundreds of new builds.
Developers market these as “dream homes” for first home buyers or investors—but here’s the trap: you’re often buying overvalued stock with low long-term upside.
⚠️ Why I Avoid Them:
- Overpriced at entry – You’re paying a premium for “new” that disappears fast.
- Slow capital growth – These areas often sit stagnant while the rest of the city moves. Why? Because of all the new supply that’s coming onto the market.
- Low rental demand – Tenants have multiple identical options, making your property harder to lease or raise rents.
- Tiny land sizes – Smaller lots = less appeal and future development potential.
Imagine this: You buy in a new estate with 300 identical homes. Even if demand increases, buyers have hundreds of similar properties to choose from. It’s hard to create scarcity or stand out in the market.
What works better? Target areas where land is finite, character homes exist, or gentrification is underway—growth drivers matter more than shiny finishes.
The Bottom Line
Just because a property is affordable or new doesn’t make it a smart long-term investment.
As a buyers advocate in Melbourne who works with investors nationwide, I help clients cut through the noise and choose properties with:
- Strong long-term capital growth potential
- Sustainable rental demand
- Lower overall risk exposure
Because playing the long game means being picky now.
📞 Need help avoiding costly investment mistakes?
Let’s chat! Whether you’re just starting out or planning your next acquisition, We can help you secure the right property in the right location—not just the one with the flashiest brochure.
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