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, LocationScore'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 LocationScore, 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 LocationScore 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 per cent which is very low ??? 3 per cent 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 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 per cent.
Currumbin Waters had over 100 people per property searching online and a healthy yield of 4.74 per cent.
On the Sunshine Coast, Currimundi recorded a LocationScore 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 LocationScore of 76.
Mr Sheppard said it had a very impressive auction clearance rate of 92 per cent: "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. 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 per cent. 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.
"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."
