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.
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.
“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.
“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.
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.
“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.”
Originally Published: www.domain.com.au
Queensland is the next property hotspot, experts say
As New South Wales and Victoria continue to experience weakness. Queensland is expected to take the lead, a National Australia Bank (NAB) poll of property professionals revealed.
According to the survey, industry experts project house prices in Queensland to increase by 0.7% next year and 1.3% in two years.
Some areas seen to perform strongly over the next year include Brisbane, Cairns, the Gold Coast, and the Sunshine Coast. Out of the suburbs, Coomera and New Farm are expected to realize robust gains.
Meanwhile, Queensland’s rental market is also poised to enjoy an upward boost, growing by 1.3% next year and 1.9% in two years. This is despite the stricter rules on housing investment.
The respondents of the survey also expect Queensland to retain foreign buyer interest. In fact, the share of foreign sales hit a four-year high of 22.8% over the previous quarter.
The results of the survey go against NAB’s own projection of the market. For instance, the bank expects house prices to remain flat in Brisbane over the next three years. Unit prices, on the other hand, is seen to fall by 4.5% over the next year.
NAB chief economist Alan Oster said Brisbane’s housing market seemed to be going sideways and its unit market still creates concern.
“It hasn’t peaked yet, so that’s good. We’re seeing quite strong economic activity in Queensland, so that always helps,” Oster said, as quoted by The Courier-Mail.
Gold Coast house values record the biggest growth in Queensland
The Gold Coast has recorded the strongest growth in house prices in Queensland over the past 12 months.
GOLD Coast house prices are leading the way in Queensland, up six per cent in the past 12 months to an average $620,000.
The latest figures by the Real Estate Institute of Queensland show homes on the Glitter Strip are $35,000 more on the same time last year.
Unit prices are up 1.9 per cent to $428,000.
REIQ data reveals houses on the Glitter Strip are worth $35,000 on the same time last year.
REIQ’s Queensland Market Monitor for March said the strong population growth came on the back of infrastructure projects such as the $550 million Gold Coast Health and Knowledge Precinct and M1 upgrades.
“The property market has been one of the big winners from the sporting event as the $1.5 billion infrastructure investment has boosted confidence and demand for housing in the region,” the report stated.
“We expect house prices will show an upward path in 2018. However, this growth will most likely be more moderate.”
A quiet real estate period leading up to, and during, the Commonwealth Games likely contributed to a slight drop (-0.3 per cent) in the March quarterly median sales price, the report reveals.
Andrew Henderson says a growing population and employment opportunities were contributing to a strong property market. Picture: Jerad Williams
REIQ Gold Coast zone chairman Andrew Henderson said he expected interstate migration to continue to benefit the city.
“I expect the market to remain strong,” he said.
“There is a heavy amount of interstate buyers moving here.
“I was at an auction recently where the winning bidder was from Sydney and the underbidder was from Melbourne.”
Mr Henderson said growing employment opportunities were also attracting homebuyers to the city.
The Gold Coast property market is expected to remain strong.
“We have some of the best health facilities in the country and our universities are world recognised.
“Those two things alone complement the tourism industry and the lifestyle aspects that the Coast offers.”
The report found the fastest-selling suburbs on the Coast included Worongary, Merrimac, Highland Park, Mudgeeraba and Carrara.
It also revealed the rental vacancy held tight throughout the first quarter of the year at 1.1 per cent.
Andrew Bell says the Coast had evolved from a tourist town into a vibrant city with an expanding economy. Picture Mike Batterham
Ray White Surfers Paradise Group CEO Andrew Bell said the Games heralded the next chapter for the Coast, as it evolved from a tourist town into a vibrant city with an expanding economy.
“The city’s property market is riding the irreversible momentum that has now come to the Gold Coast in terms of economic diversity and with more employment options we will need more housing options for people,” Mr Bell said.
“We are no longer going to be subject to tourism upsides and downsides as we were in the past because our economy has well and truly diversified beyond just tourism.”
Australia’s golden triangle of opportunity
It was great to be back on the Gold Coast for the 21st annual Australasian Real Estate Conference (AREC), attended by over 4,000 of Australia’s best industry professionals. While I was there I was once again reminded of how much potential the South-East Queensland property market is offering both sea changers and investors at this stage in its market cycle.
In my view, Brisbane is the best market in Australia currently for short to medium term price growth, with the value gap between it and the other big East Coast capitals as large as I’ve seen it in many years.
When you factor in the key drivers for future growth – liveability, affordability, scale and future economic prospects, they all suggest that Brisbane is a market to invest in. Check out the latest statistics from CoreLogic below.
Value gap – median house prices
Value gap – median apartment prices
I’ve been bullish on Brisbane for many years and in hindsight, I called its next growth phase a couple of years too early. It’s had some growth in recent years but there is a lot more to come over the next few years.
According to McGrath’s top prestige agent in Brisbane, Alex Jordan, one of the dominant trends today is downsizers buying up luxury apartments.
Alex says: “Despite the reported oversupply in Brisbane’s inner city apartment market, we are seeing great strength in the prestige apartment sector.
“The luxury apartment market ($1M+) is driven by owner occupiers, particularly baby boomers and empty nesters, who are attracted to less maintenance and better accessibility.
“Popular suburbs include New Farm, Newstead, Teneriffe, Kangaroo Point, South Brisbane, St Lucia, Paddington and the Brisbane CBD. These areas offer a desirable lifestyle with an abundance of shopping, dining and entertaining precincts at their doorstep.”
South East Queensland has so many options for asset-rich, cash-poor southerners. Many of our customers in Sydney and Melbourne are looking closely at South East Queensland both for investment and a potential sea change. I believe its affordability will continue to attract record levels of interstate migration.
If you live in Sydney or Melbourne and you’re struggling with the mortgage and cost of living, Brisbane is a fantastic alternative. It offers big city job opportunities, high quality education options and the chance to transform your financial future.
The boom delivered Sydney and Melbourne home owners a capital gain of up to 75% – that’s enormous new equity that could be cashed in to fund an amazing new lifestyle with far less mortgage stress up north. Plus, you’d be buying in just before Brisbane’s next wave of price growth. It’s the perfect scenario.
I believe the area from the Gold Coast to Toowoomba and up to the Sunshine Coast is Australia’s golden triangle right now.
Toowoomba, with its expanded airport facilities which have opened up easy access to the south, is the perfect and affordable treechange destination. Known as Queensland’s Garden City, about 2,300 people moved here from Brisbane last year for its cheaper house prices and enjoyable regional city lifestyle.
Both the Gold Coast and Sunshine Coast are also appealing sea change options benefitting from a raft of new infrastructure that will drive further population growth and generate more local jobs.
Brisbane is one of the world’s great cities but I don’t think this is fully realised as yet. If you haven’t been to Brisbane for a number of years, get on a plane. This is a thriving city that offers many of the lifestyle amenities you love about the southern capitals but at a much cheaper price.
I think Brisbane will also become very attractive to migration and investment from Asia in the years ahead.
South East Queensland is offering opportunity everywhere for both owner occupiers and investors alike. Now’s the time to consider what Australia’s premier lifestyle market can do for you!
Market Place5 years ago
Australia’s Housing market
Market Place7 months ago
Inside the Gold Coast’s biggest property sales of 2017
Commercial Property10 months ago
Construction Under Way On New Hope Island Shopping Centre
Market Place6 months ago
The Gold and Sunshine Coast markets are making a comeback
Market Place6 months ago
Seaside suburbs the star performers of southeast Queensland property market
Developments6 months ago
Find out what’s tipped to define the Gold Coast market in 2018
Infrastructure9 months ago
Pimpama’s new $100m shopping centre
Market Place6 months ago
A coastal Queensland property was viewed by prospective buyers more than any other in Australia