Thinking of Buying a Holiday Home? Here’s What to Consider
As summer rolls in and millions of Aussies hit the road for a well-earned getaway, it’s not uncommon for some to start dreaming of owning their own holiday home. But is it a smart move? And can a weekender still make financial sense? Let’s break it down and explore how to fund a vacation property.
A Holiday Home Is a Big Financial Commitment
Whether it’s a coastal retreat or a hinterland hideaway, buying in a popular holiday spot can be a serious investment.
For example:
An apartment in Coolum on Queensland’s Sunshine Coast could set you back around $870,000.
A house in Byron Bay? You’re looking at about $3.5 million.
That said, there are more affordable options out there:
A unit in Victoria’s seaside town of Portland costs around $304,000.
Houses in WA’s Margaret River or SA’s Barossa Valley start from around $670,000–$770,000.
Can a Holiday Home Be a Smart Investment?
It’s easy to get swept up in the holiday vibes and picture yourself enjoying endless summer days in your own private getaway. But before you sign on the dotted line, take a step back and think about the long-term financial benefits.
Ideally, you want your holiday home to grow in value over time. But because these properties are often in regional areas, capital growth can be unpredictable.
Some regional markets, like Mackay, Geraldton, and Townsville, are currently experiencing exceptional growth. Others, like Batemans Bay in NSW and Warrnambool in Victoria, have seen declining values.
Moral of the story? Do your research to understand the local property market and its potential for capital gains.
Can a Holiday Property Pay for Itself?
Thanks to platforms like Airbnb and Stayz, many holiday homes now generate short-term rental income. But there are a few catches:
Some state governments are capping the number of nights a property can be rented out.
Certain councils (such as Hobart City Council) are increasing rates for short-term rental properties.
These factors can impact your return on investment, so it’s important to factor them into your budget.
On the flip side, if your holiday home is rented out or available for rent, you may be able to claim some of the ongoing costs as tax deductions. This could help offset expenses like maintenance, insurance, and property management fees.
How to Finance Your Holiday Home
A mortgage for a holiday home works much like a standard home loan, but with a few key differences:
Because holiday properties can have seasonal demand, lenders may see them as riskier and require a larger deposit.
Your lender may classify your holiday home as an investment property, which could mean higher interest rates.
If you already own a home, you may be able to leverage your existing equity instead of providing a cash deposit.
Ready to Make It Happen?
Buying a holiday home can be both a lifestyle upgrade and a savvy investment—if you do your homework.
If you’re thinking about making a move, give us a call. We can help you explore your financing options and turn your holiday home dream into a reality.
Disclaimer: This article provides general information and should not be considered financial or tax advice. It does not take into account your personal circumstances. Always seek professional advice before making financial decisions. This content is protected by copyright laws and cannot be modified, reproduced, or republished without prior written consent.
