Holiday towns across the South Coast continue to attract buyers seeking both lifestyle enjoyment and long-term investment potential. With steady tourism, strong short-term rental demand, and limited coastal supply, these markets can offer excellent opportunities when approached with the right strategy.
But buying in a tourist-driven location is very different from purchasing in a traditional residential suburb. Understanding the rhythms of the market, the financial realities, and the features that drive year-round appeal is essential for making a confident and profitable decision.
Below is a detailed, practical guide to help you assess whether a holiday home investment is right for you.
UNDERSTANDING SEASONAL DEMAND AND OCCUPANCY PATTERNS
Unlike conventional rentals, holiday properties earn income in peaks and troughs. Summer holidays, long weekends, and event periods often generate significant revenue, while winter months may be quieter. The key is to view income annually, rather than judging performance based on a single busy month.
When researching an area, pay attention to:
- Year-round occupancy rates
- Peak versus off-peak nightly pricing
- Historical demand trends
- Whether the town attracts visitors in all seasons or is largely summer-driven
Locations such as Kiama, Gerringong, Mollymook, and Jervis Bay tend to perform consistently due to strong tourism infrastructure and established visitor appeal.
LOCATION AND PROPERTY FEATURES THAT DRIVE STRONG RETURNS
In holiday towns, small differences in location can create large differences in demand. Properties that offer convenience and lifestyle appeal typically outperform those further inland.
Top-performing attributes include:
- Walk-to-beach positioning
- Ocean views or elevated aspects
- Proximity to cafés, restaurants, and coastal walking tracks
- Good parking and easy access for guests
- Modern interiors and low-maintenance finishes
Well-renovated properties or updated coastal cottages often secure steady bookings because guests prefer homes that feel clean, modern, and comfortable.
A trusted Southern Highlands buyers agent with South Coast knowledge can help you identify the pockets that consistently generate strong demand and long-term value.
REALISTIC COSTS, FEES, AND COMPLIANCE REQUIREMENTS
Short-term rental properties come with additional running costs that should be factored into your investment planning. These may include:
- Cleaning and linen turnover
- Property management fees
- Higher insurance premiums for coastal locations
- Council regulations, registration fees, or rental caps
- Increased wear and tear from guest stays
Understanding local council rules is essential. Some tourist towns have introduced conditions around maximum nights, permitted zones, or development restrictions. By reviewing these early, you can avoid choosing a property with limitations that affect rental performance.
LONG-TERM CAPITAL GROWTH IN HOLIDAY DESTINATIONS
Holiday markets are not just about short-term income. The most sought-after coastal towns have historically shown strong capital growth due to limited supply and enduring lifestyle appeal.
Suburbs like Kiama, Gerroa, Gerringong, Huskisson, and Mollymook have demonstrated steady long-term performance as both owner-occupiers and investors continue to compete for well-located homes.
Homes with scarce features, such as uninterrupted views or walk-to-beach access, tend to hold their value even during market slowdowns. This makes them particularly appealing for buyers planning to hold the property for more than five years.
IS A HOLIDAY TOWN THE RIGHT FIT FOR YOUR INVESTMENT STRATEGY
A holiday home investment works best for buyers who:
- Want a property they can occasionally enjoy themselves
- Understand seasonal revenue patterns
- Aim for long-term capital growth
- Value lifestyle appeal as part of their investment decision
- Prefer high-demand suburbs with limited supply
Those who approach the market with a clear strategy often secure properties that perform strongly both financially and personally.
Looking to invest in a thriving holiday town? We can help you spot the winners.
Contact Katie Marsden at Earth Property Buyers Agents on +61 418 797 701 for expert guidance on securing the right holiday home investment.
