A Victorian favourite for that weekend escape from the city, the Mornington Peninsula is much loved as a holiday destination for Melburnians. Known for its beautiful scenery, the Mornington Peninsula may not have the same level of nightlife as Melbourne and inner city suburbs, but the daytime lifestyle is the main attraction. Being close to plenty of gorgeous, isolated beaches with options for lazing, swimming, scuba diving, sailing or surfing – plus a beautiful hinterland filled with world class wineries and seasonal produce – is certainly proving to be an attraction for permanent residents too.

For those who are looking to escape the congested or fast-paced lifestyle of the city regions, to be able to see the stars and smell nature rather than traffic fumes, and to listen to the sounds of silence and birdlife rather than trains, trams and emergency sirens, the Mornington Peninsula is certainly one of the favourite choices for relocation. Upgrades to infrastructure continue to not only make the Mornington Peninsula a desirable living destination but are also shortening travel times to the city.

With Melbourne having experienced the second largest increase of capital growth in Australia over the past ten years (second only to Sydney), many homeowners have seen an opportunity to borrow on their equity or sell their existing homes to buy properties either on the coastline or in the country, either as their permanent place of residence or as a second home - where they can enjoy the benefits of a lifestyle in the country over the weekends, or extended periods of time for many retirees and downsizers.

Victoria’s holiday home market has reached new heights because cashed-up downsizers are buying multiple properties after selling their family home. As the state government moves to introduce a new tax on vacant properties in the inner city, thousands of houses remain empty in popular holiday destinations in areas like the Mornington Peninsula.

The property industry says the trend of baby boomers purchasing multiple properties emerged off the back of Melbourne’s exponential house price growth, with equity being borrowed against or sold to fund purchases on the coast. Inner suburban homes are being sold to fund the purchase of smaller apartments in Melbourne and allow for a second property purchase on the coast. As a result the holiday home market is flourishing as empty-nesters look to split their time between the city and the beach.

Property sales records are showing a significant interest in holiday homes that are also acting as permanent residences for those who are a part of the rising trend of the flexible workspace. With the world of ‘consulting’ on the rise, more and more people are negotiating the option of working from home.

According to Sam Danckert, Director of Danckert Real Estate, “Around 80% of our property sales have come from inner Melburnians. Young families relocating make up the majority of purchases under $2million, with empty-nesters and retirees aged 65+ accounting for purchases over this figure. Holiday homes still play a significant part in property purchases, with around 50% of properties under the $1.5million mark falling into the holiday house bracket."

So how sound an investment is the purchase of a holiday home? Like any investment, it’s critical you look at the pros and cons of buying a holiday home to see if it makes financial sense for your personal circumstances:

PROS:

• Flexibility to stay at your holiday home whenever it suits you.
• The ability to lend it to family and friends.
• The opportunity to generate income from renting it out as a holiday letting. This can help to offset some costs of holding the property, and in some popular locations you can charge rental rates that far exceed your mortgage.
• Have the option to retire in it, particularly if you have purchased a holiday home in a location that ticks all your boxes.
• May benefit from tax deductions that apply to holiday homes
• Could see the property appreciate in value over the long term, especially if it's in a high demand area.

CONS:

• Due to the seasonal nature of holiday destinations, your property may not be tenanted as often as you would like or need to make it financially viable.
• Once you've factored in all the associated, ongoing costs of holding the property, it may not be worth keeping your holiday house for the long term.
• The need, and cost, of finding someone to manage the property for you - to take care of advertising, holiday lettings and maintenance.
• You may get bored of going to the same destination year in year out - and feel constrained by having to use your holiday house.
• Like any investment property, you run the risk of your holiday house declining in value, or not appreciating enough to offset the holding costs.
• You also need to consider the tax and financial implications of buying a holiday house. The bottom line from the ATO is that you can only only claim deductions for periods when the holiday home is rented out or is genuinely available for rent. This means you can't claim deductions for the proportion of expenses that relate to any private use (by you, your family, your relatives and your friends who stay free of charge).

If you're wondering what tax deductible expenses are claimable on a holiday property, these include (but are not limited to - make sure you seek sound financial advise):

• Interest on the loan for your holiday property
• Insurance on your holiday house
• The commission your letting agent or real estate agent charges
• Ongoing costs like council rates, maintenance and repairs
• The depreciation of your assets
• Capital works or construction costs

If the current trend for owning a smaller property in the city and a holiday/second home in a coastal or rural area is anything to go by, many investors are focused on the pros rather than the cons.

MT MARTHA

Mt Martha is one of the Mornington Peninsula’s most sought after locations. With its compact, quiet lifestyle based around the beautiful Port Phillip Bay and Balcombe Creek, Mt Martha is an ideal spot for families and couples looking to downsize or enjoy a seaside lifestyle.

The cosy, beachside location provides a lovely backdrop to this family-friendly area. You’ll find many loyal local families who have raised their kids in the area, as well as more mature couples enjoying a stress-free lifestyle filled with both beach walks and bush walks. While the area does get its fair share of summer tourists, its small size means that it sees fewer than neighbouring towns.

While the streets inland are home to neat units and ideal family homes with rambling gardens and green-lined streets uninterrupted by footpaths, Mount Martha also boasts an enviable share of some of the most exclusive houses on the Peninsula.

According to homesales.com.au, Mt Martha has a population of around 17000 residents. The median price for houses is $1,028,592, and there has been a growth by 38.77% in the past three years. Houses in Mount Martha take an average of 70 days before selling and there were 292 houses sold last year.

If you're keen to look at investment properties in the Mt Martha area, or if you're looking for a permanent residence, call the team at Danckert Real Estate - 5904 6446.

www.danckert.com.au