The coastal property boom has crossed the waters as baby boomers, sea changers and investors hop on a ferry to seek out an island home.
The result has been a doubling of prices in many island locations around Australia. But it is potential capital growth rather than rental returns that are powering much of the investment.
On Magnetic Island, off Townsville, prices are booming as developers put their plans into action for apartments, resorts and a vast marina in the 30 per cent of the island not classed as national park. In some cases, prices have doubled in the past year, largely due to the development of the harbor and new infrastructure, along with an influx of sea changers, says Ian Ivers, principal, Magnetic Island First National.
"About a year ago, we were fetching $140,000 to $150,000 for properties that are now attracting $280,000 to $300,000," he says.
On Kangaroo Island, off the coast of South Australia, prices have doubled in 12 months, fuelled by local and interstate investorsand baby boomers planning retirement. Prime land in the area known as Island Beach has jumped from $150,000 to $300,000 for a 1000-square-metre block. And in the boating and fishing township of American River, prices have climbed from $65,000 to $125,000 and, for the cheapest blocks, from $15,000 to $50,000, according to David Churchill, of Weston Raine & Horne, Kangaroo Island.
The penguins may lure domestic and international tourists to Phillip Island, Victoria, but it's the sea changers and commercial property investors who are behind the recent climb in prices.
Peter Buitenhuis, property consultant, Judith Wright Real Estate, Phillip Island, says prices have been strong for the past five years. In the past 12 months, the average increase has been about 30 per cent.
"Our market was probably underpriced," he says, "but now we are selling places for $300,000 that three or four years ago were fetching about $100,000. Permanent rental return is about 3 or 4 per cent, and between 5 and 7 per cent for holiday rentals.
"A proportion of our investors in the 45-to-55 age group are looking at semi-retiring and spending part of their week in Melbourne and the other part on the island. Commercial investment is so strong that we have a waiting list. A small retail shop of about 1200 square metres is fetching $400,000 to $500,000 and will rent for about $350 a week."
When LJ Hooker Margate sales consultant Andree Schepers looked at property on Tasmania's historic Bruny Island 18 months ago, a one-hectare block carried an $18,000 price tag through private sale. He recently sold the same block for $110,000. "Waterfront property has more than doubled in the past 12 months, as has anything that is exceptional," he says.
Just don't count on rental returns from your island paradise to sustain your investment. A property that rents for $260 in Townsville commands just $220 a week on Magnetic Island, a 30-minute ferry ride away.
You'll get more for holiday rentals on the island, but only during the high season, from June#p#分頁標題#e#
to October, and at Easter and Christmas.

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