The month in review: Sunshine Coast
By Herron Todd White
April, 2010
Holiday homes and the Sunshine Coast - the two are
synonymous. Whether it be a holiday unit, a holiday
home or a weekend hobby farm, holiday properties can
be found right across the Sunshine Coast and hinterland.
There is no question that during the past 18 months, these
holiday/discretionary type properties have been one of
the hardest-hit sectors. Quite often the first thing to go
when the economic climate toughens up is the holiday
home. This, combined with the softening in demand, has
certainly seen the value levels fall significantly.
As reported in previous MIRs, it would appear that
over recent months the holiday home/unit market has
stabilised somewhat as the number of home owners who
have been forced to sell have already done so. Therefore
we are left with vendors that appear to be able to hold
on under the current circumstances, however only time
will tell.
The softening in market conditions has led to great
opportunities, to buy a property in a location that was
previously unattainable, at a price significantly below
replacement cost.
Houses in coastal areas continue to remain popular.
As noted in previous MIRs, the prestige sector of these
housing markets has seen an increase in affordability.
To buy properties at below replacement cost within
this prestige sector is now the norm rather than the
exception.
The holiday/investment units have also experienced
an increase in affordability. You do get a lot a ‘bang for
your buck’ now. But there is an interesting factor that
is, dampening demand in this sector. There has been a
significant increase in body corporate levies on the back
of rises in utilities, maintenance and management costs.
These additional costs have certainly affected demand.
Therefore, to get a good return on these properties you
really do need to be in a prime building that has very
good management, leading to high occupancy rates if
you are holiday letting the unit in addition to your private
use. As an alternative, buyers could look for those smaller
complexes with no on site management and therefore
lower body corporate costs if they are just private holiday
lockups.
Like anything in the current economy, when investing in a
holiday home, you need to take a softly, softly approach.
You need to take your time, look at the fundamentals
and make sure that they all add up. With the level of
choice out there, it is even more important to select well,
remembering profit is most often built into the purchase
rather than the future sale.
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