Holiday home bookings for this Christmas and New Year are higher than they have been since 2007, providing a strong indicator of confidence returning to the local economy.
According to RE/MAX WA managing director Geoff Baldwin, enquiries and bookings for short-term holiday accommodation had more than doubled in 2012 after very low demand in recent years, showing people are again starting to commit money to discretionary spending, which is a very positive sign.
“We are heartened by the fact a majority of the short-term rentals we have available have been fully booked for the holiday period and in many cases advance bookings have even been made for Christmas 2013," Mr Baldwin said.
“For the whole of 2011 the average uptake for holiday accommodation was only 15 per cent, or around 52 days, however 2012 has seen this average more than double, indicating people are becoming more open to discretionary spending.
“Normally a well-located, fully-furnished holiday property will average the same rent in one or two nights as many conventional full-time rentals charge for a full week.
“For example, holiday property on the river in South Yunderup about an hour south of Perth attracts around $350 a night in peak times and $250 a night in off peak. However, it would only bring $400 a week as a conventional rental.
“This lift in demand for holiday rentals will also attract buyers back to that market after it being pretty much neglected for the past three years," he continued.
“The holiday home market was one of the hardest hit sectors with the economic downturn, but it is also one of the quickest to recover. Hence there are currently some attractive opportunities for investors as the market again heads northwards.”
Australia’s largest online holiday rental site has confirmed short-term rentals are on the rise.
Stayz’ Anton Stanish, general manager for travel marketplaces (Fairfax Media), told Residential Property Manager's sister publication, Smart Property Investment, that this is a fast growing sector.
“Based on current enquiry and booking numbers, we are expecting a 20 per cent jump in bookings for January, compared with January 2012,” Mr Stanish explained.
There are a number of reasons investors are considering this path.
In February 2012, Stayz Group Accommodation Index Survey found 52 per cent considered it to be a flexible method, allowing for private use and extra income. A further 46 per cent cited higher yields when letting for short stays.
The survey asked 837 holiday property owners and managers the reasons for this investment choice.
Based on last summer booking numbers for Stayz by destination region, the current top spots for rentals are: South Coast (NSW), Great Ocean Road (VIC), Bays and Peninsulas (VIC), Gold Coast (QLD) and Perth (WA).