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The best holiday destinations around Australia to also invest in

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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.”

NSW

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.

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.

Queensland

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 investment

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.

Victoria

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 per cent.

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

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.

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.”

Originally Published: www.domain.com.au

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Opinion

House prices: Australia’s property market facing longest downturn in decades

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australian property

Aussie homeowners could find the value of their properties slashed by as much as 15 per cent as our housing slump deepens. It seems there’s no relief in sight for Australian property owners as experts warn house prices will continue to tumble well into next year.

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Experts warn of ‘debt bomb’ as housing downturn worsens

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AUSTRALIA is facing a “debt crisis” — and the property market and our entire economy are at risk as a result.

That’s according to the sobering 60 Minutes segment Bricks and Slaughter which aired last night, revealing the country’s property downturn was just the tip of the iceberg.

According to reporter Tom Steinfort, the current slump is actually “more like falling off a cliff”, with a number of real estate and finance experts claiming houses could plummet in value by up to 40 per cent in the next 12 months.

If that happens, it would also cause an economic “catastrophe”.

Mr Steinfort spoke with data scientist Martin North from Digital Finance Analytics, who said Australia was uniquely vulnerable when it came to an economic crash tied to a property downturn.

“At the worst end of the spectrum, if everything turns against us we could see property prices 40-45 per cent down from their peaks, which is a huge deal,” he said.

“There’s $1.7 trillion held by the banks in mortgages for owner-occupies and investors. And that’s about 65 per cent of their total lending.

“That’s higher than any other country in the Western world by a long way.

“There’s probably no country in the world more susceptible to the ramifications of a housing crash than Australia. We are uniquely exposed at the moment.”

Mr North said Australia was now in the same position as the US was back in 2006 and 2007 — a position which triggered an economic collapse.

“As a society, and as a government, and as a regulatory system, we’re all banking on the home price engine that just goes on giving and giving and giving. It’s not going to,” he said.

“We’ve got a debt bomb, we’ve got a debt crisis and at some point it’s going to explode in our face.”

debt bomb

Melbourne homeowner Mohammed Souid told 60 Minutes his family was experiencing mortgage stress. Picture: 60 MinutesSource:Supplied

It’s a sentiment shared by Laing and Simmons real estate agent Peter Younan, who said the median house price in his patch in Granville in Sydney’s west had dropped from $1.2 million to $1 million in just one year — a shocking $200,000 plummet.

He said foreclosures had also risen by 600 per cent in the region.

“The mortgage stress is definitely being felt especially in this area,” he said.

60 Minutes also spoke with several Aussie homeowners who gave harrowing details of the stress they faced trying to pay off their mortgages, including having their power turned off and being “hounded’ by their banks.

What does a million dollars buy in Aussie capital cities?

debt bomb

Market analyst Louis Christopher of SQM Research said the market had been “clearly overvalued”, labelling the downturn as the “correction we had to have” — at least in Sydney and Melbourne.

“On our numbers, Sydney was effectively over 40 per cent overvalued. And Melbourne was overvalued by about the same amount,” he said.

But property investor Bushy Martin said the blame lay squarely at the feet of buyers who “mortgaged themselves up to their eyeballs” in a bid to snap up dream homes before being able to afford them.

debt bomb

Property investor Bushy Martin says homeowners are to blame for the crisis. Picture: 60 MinutesSource:Supplied

However, the segment has also sparked backlash online, with some claiming the situation had been exaggerated.

One Reddit user branded the report as an example of “alarmist journalism and scare tactics”, while another said it was “dramatic and cringe-worthy”.

Others also criticised the segment for making it seem like all homeowners would be affected, when the downturn was actually mainly focused in the NSW and Victorian capitals.

And some said it was unfair to blame the banks for the situation, and that homeowners needed to take responsibility for their own decisions.

That was in response to comments made by one homeowner on the program, who said the bank had “suddenly switched the mortgage to interest and principal”, raising his repayments by 57 per cent.

“The interest only part annoyed me the most. The bank didn’t ‘suddenly change’ your repayment from (interest only) to (Principal and interest) your IO term expired. You a) knew this would happen and b) assumed the bank would renew it when it expired. I hope this speculator gets burnt first,” one Reddit user said.

Related articles: Experts warn of ‘debt bomb’ as housing downturn worsens

Source: news.com.au

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Opinion

This suburb has been identified as one of Australia’s most consistent property markets and it’s on the Gold Coast

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ONE of Australia’s most consistent property markets is on the Gold Coast and is primed for future price growth.

Clear Island, where this home at 8 Istana View is listed for sale is among Australia’s most consistent property markets.

ONE of Australia’s most consistent property markets is on the Gold Coast and is primed for future price growth.

Clear Island Waters has been identified in the latest Hotspotting Price Predictor Report in the top four most consistent Australian suburbs for property sales.

According to Terry Ryder of Hotspotting the suburb was one which recorded a consistent level of sales and demand quarter after quarter.

It has recorded about 40 property sales every quarter for the past two years, despite its high median house price of $1,150,000.

It’s median house price increased by 16 per cent in the past 12 months.

Mr Ryder said consistent sales patterns were generally a precursor to price growth and that suburbs such as Clear Island Waters “represented safety for investors’’.

“They are usually not boom markets, but have the valuable quality of solidity. And markets with this high level of even performance often have good price growth over time,’’ he said.

Mr Ryder said it was an exampled that consistent markets could produce good price growth in the short-term and steady long-term capital growth rates.

Real Estate Institute of Queensland Zone Chair Andrew Henderson predicts a lift in buyer activity on the Gold Coast during spring.

The Gold Coast has grown up

gold coast houses

“Historically as the weather warms up moving into springtime we also see an increase in buyer market activity and there is a rise in the number of properties being listed for sale with planned spring auction dates,’’ he said.

“We are anticipating continuing buyer activity with the strong migration numbers to the Gold Coast form interstate and also with the number of auctions being conducted increasing each week.’’

Mr Henderson said units close to the beach were in demand from owner occupiers, property investors and also those looking for a beachside “weekender”.

Source: www.news.com.au

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