More modest investors who were advised to sink their money into property in booming mining towns have also had their fingers burnt.
While some economists warn of a house price bubble in Sydney that could see prices fall when interest rates rise, prices in the mining regions of Western Australia are already falling.
And the fall in commodity prices and mining slowdown is significantly impacting on Perth and Darwin prices too.
SQM Research data shows that the asking price for three-bedroom houses in Port Hedland is just over $800,000 compared with $1.3 million in 2012.
In Karratha, another Pilbara town, the story is similar. While house prices never soared to the extent that they did in Port Headland, asking prices for three-bedroom houses have plunged 40 per cent over the past three years, to $457,000.
Some property experts recommended city investors buy houses in mining towns. Investors who bought at the top of the market have been burnt.
"The drop in house prices follows plunging demand for rental properties as fly-in workers fly out and stay out," says Louis Christopher, the managing director of specialist property researcher SQM Research.
"While demand was super-hot during the mining boom, now that the mining sector has contracted sharply, thousands of jobs and workers have disappeared from Port Hedland and other mining towns, slashing demand for property and rents," he says.
The fall in commodity prices and the ending of the mining boom is even feeding through to Perth and Darwin, Mr Christopher says.
"The number of listings has jumped in Darwin and Perth as the commodities downturn hits home, he says. "Darwin recorded the highest monthly increase in stock levels of all the capital cities, increasing by 6.7 per cent during January 2015 to 1,843 and up a huge 34.2 per cent, year-on-year," he says.
Perth shows a monthly rise in real estate listings of 5.4 per cent, 21 per cent higher, year-on-year. "Perth and Darwin appear to be in deep trouble," Christopher says.
"The reason for the oversupply is that you have sellers coming onto the market who are not absorbed by the buyers – so the listings increase as new listings come on," he says.
However, Sydney and Melbourne recorded a drop in listing for the month with both cities also recording drops year-on-year.
Christopher said the Sydney market remained strong, while the outlook for Melbourne is "mixed". CoreLogic RP Data shows that prices of houses and units rose in Sydney and Melbourne over January and fell in Darwin, Perth and Adelaide.
The Sydney auction season has started strongly with a clearance rate of close to 80 per cent last weekend. The market remains strong, Christopher says.
Melbourne's market remains strong in the inner ring, in suburbs such as Albert Park, Carlton, Richmond and, to a lesser extent, St Kilda, Christopher says. Inner city apartments in Docklands and Southbank are still weak, he says. For the 12 month to January 31, 2015, Sydney prices rose 13 per cent and Melbourne prices by almost 7 per cent. Perth, Darwin and Adelaide prices were flat.
The 12 month numbers from CoreLogic RP Data agree, broadly, with the housing statistics out this week from the Australian Bureau of Statistics. Record-low interest rates are supportive of property prices, but only to a point, Mr Christopher says.
In towns reliant on one industry for employment that will be the over-riding factor in determining house prices, he says.