LocationScore states that even though many property investors avoid tourist hotspots, there are still great investment opportunities available in top destinations. a property-research platform that interprets big data to analyse and scoreEvery suburb in Australia
Before you start looking for vacation homes on Noosa and Mornington Peninsula, make sure you read this tip.
LocationScore uses eight indicators to rank each suburb. These indicators are used to evaluate the supply and demand levels as well as growth prospects. The Location Score is a number between 0 and 100. 50 is the theoretical equilibrium between supply-demand. The higher the Location Score, the greater the potential for growth. Because demand is greater than supply
LocationScore’s cofounder and research chief Jeremy Sheppard said that the belief that holiday homes are poor investments is not always 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,” he 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.”
Sheppard explained that even though some suburbs weren’t popular tourist spots, they were still close to them.
“Another point to consider is that not everyone wants to holiday in the middle of classic tourist locations,” he said. “These areas are often close to popular spots but removed enough that the local property market appeals for investors.”
New South Wales
Banora Point’s Location Score is 79. Nearby Bilambil Heights houses are 75.
Both suburbs were popular with holidaymakers from the north and south, and are located near the Gold Coast.
Sheppard indicated that buyers are eager to buy Banora Point units quickly.
“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.”
Queensland
Sheppard suggests that, while Queensland has many well-known tourist destinations, they aren’t all the best investments.
“Just because a suburb or town is desirable, doesn’t mean it’s in demand. They might be located in beautiful areas, but are they going to rise in price? Are they being sought after by enough people?
“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 is Queensland’s top holiday destination for those looking for high-growth property investments.
“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,” Sheppard said.
