- Mandurah, Busselton, Margaret River and Yallingup all remain popular
- Many of those seeking sea changes can do so due to equity in their primary homes
- On the flip side, many of those with homes in the South West still maintain smaller properties in the city
There is a growing sector of the property investment market who are seeking and purchasing properties that double as an investment and a holiday home.
The popularity of the South West regions, namely Mandurah, Busselton, Margaret River, Yallingup are all proving to be huge draw cards.
The below SQM chart shows prices in Busselton have exceeded their previous peak.
Busselton
Other rural and coastal towns are showing renewed interest, such as York, Toodyay, Lancelin, Gingin and Jurien. They have all seen a large influx of Baby Boomers.
This reflects the trend that Baby Boomers are new reaching a stage in their life were they are seeking a sea change. Most have the financial resources, given the substantial equity in their home and a good secure income, to be able to afford these second homes.
These homes range from rambling beach shacks to swanky apartments with club med-type facilities, to small acreages and hobby farms.
Second home in…Perth
Notably, there are certain investors from rural and regional cities who are purchasing city apartments not just as investments, but as a city base for business and pleasure. Typically, these properties are generally centrally located and have a good number of facilities to utilise when in Perth.
In light of the lifestyle investments, we have seen these areas enjoy excellent capital growth and indeed will continue to do as the push for these investments continues.
Not only are these holiday homes/hobby farms becoming a place to enjoy great capital growth and holidays, but they are also now becoming the situation that many buyers are now holidaying in their retirement home during peak periods before they retire and having the use of it whilst still working and offsetting some of the costs by renting the property out for the rest of the year until retirement.
By enlarge a new wave of regional investor/purchaser have been nicknamed, VESPAs by Australian leading demographer Bernard Salt.
Bernard has identified an influx of families and couples purchasing in regional centers to escape the Covid pandemic and to enrich their lifestyles at a far lower price tag than in a capital city.
VESPAS scooting along…
Virus Escapes Seeking Provincial Australia (VESPAs) is being identifiable trend especially from working remotely with the ability of using zoom style meetings in the workplace we see continuing to grow in popularity across the globe but predominantly here in Australia
There are several different tax areas involved with holiday homes and investors should seek the appropriate legal tax advice to ensure they are claiming the correct tax deductions.
It has been my experience that many investors are out of kilter with the actual deductions; some don’t claim any deductions whilst others try to claim everything. Be careful that you move forward in the correct manner with the right advice from your accountant as it’s only a matter of time until the tax man moves to audit holiday investment home deductions.
As the property market continues to grow and as the “Baby Boomers” continue to age – this trend can only continue and bring greater growth to these favoured destinations in West Australia.
