Good news moving into the Christmas holidays: there is a way to buy property where you love to vacation and make money in the process.
Many property investors usually steer clear of tourism destinations, but property research site LocationScore has crunched the numbers and identified the top holiday hotspots for property investment across the nation.
But before you start buying up units in Noosa and a house on the Mornington Peninsula, Location Score’s research has found, in general, you might have to settle for holidaying a little further from your usual wind-down location in order to get the best investment potential.
The new research scores each suburb out of 100, using eight key indicators that measure the level of supply and demand as well as growth prospects.
LocationScore co-founder and research director Jeremy Sheppard said the research showed the long-held perception that holiday homes were a bad property investment did not always hold true.
“Ordinarily I’d advise investors to buy in great growth locations, not simply a place they’d like to live in or where they like to go on holiday,” Mr. Sheppard said.
“According to Location Score, though, there are holiday locations around the country that stack up investment-wise, including having much more demand than supply, which is essential for capital growth.”
Mr Sheppard admitted some of the suburbs that made the list were not necessarily popular holiday destinations themselves but were within close range of those that were.
“Another point to consider is that not everyone wants to holiday in the middle of classic tourist locations. These areas are often close to popular spots but removed enough that the local property market appeals for investors.”
In NSW, units in Banora Point, just south of Coolangatta, had a remarkable Location Score of 79 out of 100, while houses in nearby Bilambil Heights scored 75.
Both suburbs were popular with holidaymakers from the north and south, as well as being within striking distance of the Gold Coast.
Mr. Sheppard said Banora Point units were being snapped up quickly by eager buyers.
Views for miles: Bilambil Heights, NSW. Photo: Sophie Carter Exclusive Properties
“Our measure for this is days on market. On average, units there spend about six weeks on the market, which is pretty quick – about three times faster than the national average of about four months,” he said.
“And rentals have a vacancy rate of less than 1 percent which is very low — 3 percent is the widely accepted ‘balance’ point. So renters are obviously under pressure and landlords are licking their lips.”
Closer to Sydney, houses in Kanahooka scored 78, which Mr. Sheppard put down to its Lake Illawarra location and short commuting distance to Wollongong.
He added Gosford and the Central Coast were great markets in general for growth, having a holiday feel but just a short drive from Sydney.
Houses in Berkeley Vale on the Central Coast also made the cut, scoring a solid 75.
Mr Sheppard said though Queensland had a plethora of holiday destinations, not all of them made wise investment locations.
“Just because a suburb or town is desirable, doesn’t mean it’s in demand,” he said. “They might be really glamorous locations but are they going to go up on price? Is there demand?
“To get the price growth you need people at auction bidding or making offers, driving prices up — there needs to be the competition.”
The Gold Coast was Queensland’s top holiday destination worth investing in, the research showed, with a number of suburbs ticking investment boxes like strong local employment.
The Gold Coast has rated well as a holiday hotspot for property investment. Photo: Supplied
“Houses in Worongary scored 77 out of 100, perhaps partly due to the recent announcement that a new train station is earmarked for the suburb,” Mr Sheppard said.
Elanora had nearly 100 people searching online per property listed for sale. The vacancy rate was 0.46 percent.
Currumbin Waters had over 100 people per property searching online and a healthy yield of 4.74 percent.
On the Sunshine Coast, Currimundi recorded a Location Score of 71 for November, which Mr Sheppard said was partly due to its location just north of the major employment node of Caloundra.
It may not be as glitzy as the Gold Coast, but Clifton Springs near Geelong was kicking its own property goals with a Location Score of 76.
Mr. Sheppard said it had a very impressive auction clearance rate of 92 percent: “That’s the extreme end of demand,” he said.
Port Phillip from Clifton Springs, where the auction clearance rate is an impressive 92 percent. Photo: Richard Cornish
Nearby Torquay was also a beneficiary of the strong Geelong market, scoring 70.
The charms of Swan Hill, located on the Murray River near the NSW border, resulted in it scoring 71 out of 100 for November with much more demand than supply of property, according to the LocationScore research.
Its most impressive metric was its yield of 5.88 percent. That was enough rent to cover all expenses, including mortgage interest, Mr. Sheppard said.
Tasmania’s property market had strengthened thanks to demand from local and interstate investors. Mr. Sheppard said Hobart and Launceston were the top picks for holiday investment, with both locations backed up by robust local economies.
West Launceston and Invermay were two suburbs showing strong growth prospects, he said.
Great for holidays and property investment: Launceston, Tasmania.
“When you think of all the fantastic holiday destinations around the country, it’s pretty obvious from our list that great capital growth and great investments don’t often go hand-in-hand,” Mr Sheppard said.
“Although there are some fantastic places to holiday in Australia this summer, don’t be tempted to buy in one as an investment just because you like to visit every now and then.
“You either buy a holiday home or you buy an investment property, which are two different goals, but our research shows that sometimes you can combine both — if you’ve done your research.”
Interstate migration to the Sunshine Coast is tipped to help drive up property prices. Picture: Lachie Millard
INTERSTATE migration is once again driving up demand for Sunshine Coast property.
New analysis of the market by RiskWise Property Research predicts solid capital growth for the region as a result.
RiskWise CEO Doron Peleg said the area had experienced “consistently strong population growth’’ in the past five years and predictions were that this would continue.
The Sunshine Coast market has been widely tipped by real estate analysts to experience a lift in prices, after a series of lean years.
The high-end Noosa market in particular has fired up again with a series of record breaking beachfront sales, but it was also the affordability of many of the Sunshine Coast suburbs that Mr Peleg said was helping attract new residents.
“The area’s affordability has been a major drawcard behind this migration, especially for large numbers of interstate purchasers who can’t afford to buy such great lifestyle properties in places like Sydney and Melbourne,” he said.
Also helping drive demand and future capital growth, according to Mr Peleg was the low number of building approvals in the region.
21-23 Webb Rd, Sunshine Beach was listed for a massive $22 Million. Picture: Paul Smith
He said there were only 3323 house building approvals in the pipeline across the entire region and that would be quickly absorbed.
There are also approvals for 2581 new units to be added in the two years.
Mr Peleg said there had already been 7.1 per cent median house price growth for houses on the Sunshine Coast and 5.4 per cent median unit price growth in the past 12 months.
Sydney, you’re pretty, but let’s take your prices down a notch, eh? Picture: Destination NSW
IT’S no surprise to most Australians that the cost of living varies greatly from one city, state or territory to another.
But exactly which places are the most affordable when it comes to everyday expenses including rent, fuel, groceries, transport, utilities and education? And which ones will burn a hole in your pocket faster than the others?
The latest report from Numbeo, a cost of living website which collates prices of goods and services from hundreds of cities around the world, shows that almost everything is cheaper in Hobart compared to other major cities nationwide.
It also confirmed what Sydneysiders already knew: it’s the most expensive place to live in the country. Melbourne, Darwin and Perth trail closely behind.
Labor leader Bill Shorten said the government’s priorities – including the Australian mining sector – were out of whack. “I wish they’d just start talking about everyday Aussies in terms of cost of living,” he said on Wednesday.
While Sydney ranked 32 in the list of the world’s most expensive cities, it was the 16th most expensive city in terms of rent, according to Numbeo.
Sydney has this year risen to number 32 in this year’s Cost of Living Index, up from 41 last year, according to Numbeo.
Melbourne rose to 64, up from 77, while Adelaide, Cairns, Hobart and Canberra also moved up the list to 58, 69, 82 and 103 respectively.
Only Perth (56), Darwin (68) and Brisbane (93) have become more affordable, according to the site, which ranks the results based on information provided by thousands of residents.
RENT, CHILDCARE AND RESTAURANTS
A one-bedroom, city centre apartment costs an average of $2681.48 per month in Sydney.
That’s compared with Melbourne ($1767.60), Canberra ($1733.26), Brisbane ($1726.13), Adelaide ($1705.67), Gold Coast ($1568.92), Darwin ($1524.35), Perth ($1523.41) and Hobart ($1208.33). Those with kids can more than double their outgoing expenses if they live in Sydney with the cost of sending one child to childcare full-time for a month about $2038.27. Child care is even more expensive on the Gold Coast ($2250) but significantly cheaper in Adelaide ($1600), Melbourne ($1478), Brisbane ($1243), Perth ($1214), Darwin ($1,200), Canberra ($1168) and Hobart ($683.33), according to the site.
The data also showed that costs including groceries, rent and restaurant prices were most expensive in Sydney and Darwin, while cities like Hobart, Cairns and the Gold Coast had some of the cheapest.
COFFEE, PETROL, UTILITIES
But not all is lost for Sydney – while residents might be down thousands of dollars in rent, they’re up an entire buck or two when it comes to coffee. Sydney is home to country’s cheapest hot drinks with a regular cappuccino costing about $3.90, compared with the highest median price for the same item in Darwin, at $4.75.
The Northern Territory capital might be small in size – with a total population of about 250,000 people – but it’s also home to some of the highest prices for fuel and utilities nationwide.
The national average for unleaded petrol is 138.9c per litre. But in the NT, prices soar above the rest, with a median price of 183.9c per litre in the troubled town of Tennant Creek, 176.9c per litre in Alice Springs and 150.2c per litre in the capital of Darwin, according to 2018 NT government figures. The median price for monthly utilities – including power and water – in Darwin is $332.80. That’s compared with the cheapest average of $181.20 per month in Perth. Even a meal at McDonalds will cost about an extra $2 than in other states.
MILK, BREAD AND BEER
The Gold Coast is also where you can find the country’s cheapest bread, at $2.12 a loaf. Brisbane follows closely behind ($2.14), with Sydney selling the staple food at the highest average rate of $2.80. And if you’re up for a good time at the lowest price possible, the Gold Coast is also where it’s at, with the nation’s cheapest in-restaurant domestic beer ($5.75). That’s compared to the most expensive average of $8 in both Melbourne and Darwin.
For the more straight-laced, Hobart could be a better option, boasting the cheapest milk at $1.11 for one litre. In Perth, the same product costs consumers about $1.59 – the highest average in Australia.
But the most isolated city in the world makes up in electricity prices what it lacks in cartons of milk, offering the cheapest average price for utilities in the nation. The average monthly cost of a power and water bill in a 85m2 apartment in Perth is $181.2. That’s compared to
Darwin ($332.80), Adelaide ($297.95), Melbourne (214.82), Sydney ($176.69), Brisbane ($212.60), Hobart ($236.99), Canberra ($184.73) and the Gold Coast ($184.41).
Hobart is the most southern of Australia’s capital cities, its harbour is the second-deepest natural port in the world, making it a popular destination for boaties. It’s also one of the cheapest capital cities in the country although wages are also below the national average. Hobart is also known for its arts and culture, its majestic scenery such as Mt Wellington, picturesque waterways including the Derwent River and rich cafe and restaurant scene. With a median house price of $402,000, strong capital growth and good long- term projections, the area presents a solid market.
Even suburbs that are located within less than 2km from the CBD, including North Hobart and South Hobart, with median houses prices of $582,000 and $631,000, respectively, are relatively affordable compared to cities like Sydney, where the median house price is upwards of $1 million and Melbourne where it has pushed past $840,000.
In Victoria, households are shelling out almost $75,000 a year on general living expenses, a major study of spending habits reveals.
The 2017 Household Expenditure Survey found that in 2015-16 essentials cost $843 of the average $1430 Victorians spent on goods and services each week.
Housing costs – on rent, mortgages, rates and home-and-contents insurance – were the biggest drain ($257), the Herald Sun reported.
Food, including meals out and non-alcoholic drinks, cost $244, and transport – driving, taxi fares, and train, tram and bus fares – cost $218.
A buoyant Canberra housing market is leading to healthy long-term investment options for savvy homebuyers, according to RiskWise Property Research.
While the Sydney market goes flat, many Sydney-based investors and buyers’ agents are looking to Canberra – which has a median house price of about $750,000 – as a solid long-term property market that delivers both capital growth and solid rental return.
Less than 300km southwest of Sydney, Canberra has enjoyed solid capital growth of 23 per cent over the past five years and 10 per cent in the past 12 months.
RiskWise Property Research CEO Doron Peleg said it was a trend set to continue.
“This will be driven by ongoing population growth due to the strength of the local labour market and its growing status as a city of choice for a growing number of Australians,” Mr Peleg said.
“Canberra is a rapidly expanding city with a stable property market that offers relatively affordable housing (in house-to-income terms). In addition, ongoing infrastructure projects, such as the Canberra Light Rail Network, will bring significant benefits to the area.”
An hour’s drive from the state capital Brisbane, the Gold Coast is the sixth largest city in Australia and is forecast to have 1.2 million residents living there by 2050, according to demographer Bernard Salt. The region has a stable property market that offers relatively affordable beachside suburbs, such as Miami which has a median house price of $749,000, according to industry experts.
CoreLogic’s regional market update to December 2017 places the median house price at $634,423, while the median unit price is $411,229.
RiskWise CEO Doron Peleg said that despite gaining infamy for violent incidences and drunken behaviour in Surfers Paradise, the Gold Coast was one of the most popular destinations for both owner-occupiers and investors in southeast Queensland.
“It has beautiful beachside and waterside suburbs, an unrivalled lifestyle, good infrastructure, a large number of well-off residents and locals who describe the Gold Coast as ‘heaven for children’,” Mr Peleg said.
“The Gold Coast has a stable property market that offers both affordability and excellent access to superb beach and coastal areas, and that is very appealing to buyers.”
But there are fears about what will become of the glitter strip’s property market once the Commonwealth Games, set to start this month, are done and dusted.
Collier’s Gold Coast International director Darrell Irwin said property market indicators showed the region had a “healthy sector” that would survive the exodus when the curtain closes on the Games.
“The Games has brought forward infrastructure investment in projects such as the light rail construction, and upgrades to the aquatic centre and Carrara Stadium, which have helped fuel demand across the board in the residential, commercial office, retail, and industrial sectors,” he said.
“We’ve seen commercial office vacancy rates continue to fall over the last three years to the current level of 10.3 per cent as reported in the most recent Property Council of Australia figures.
“With no new office buildings under construction, we expect to see that vacancy rate fall further.
“Similarly in the industrial market, there’s been strong demand, a falling vacancy rate and limited land supply.”