Buy your own island in the sun
By Alex May | domain.com.au | 30 April
Is an island the ultimate waterfront property bargain or do home owners pay a premium for the lapping waters, picturesque views and resort-like isolation?
It depends. Like all property, location determines the price.
In the hustle and bustle of Sydney an island home can be a less expensive way to buy a slice of the waterfront dream but in relaxed Queensland, island property prices often command a sizeable premium.
Sydney has two islands where residential property can be bought and rented - Dangar Island on the Hawkesbury River and Scotland Island on Pittwater, both of which are within 60km of the CBD and a 10-minute boat ride of the mainland.
"You could pay $1.3 million for a decent waterfront home on Scotland Island and you would have to pay maybe $3 million or $4 million for a waterfront on the mainland," says Melanie Marshall of P.M.C. Hill Real Estate. "A non-waterfront house might be $650,000 to $700,000 on Scotland Island and you would pay $900,000 to $950,000 for the same thing around Mona Vale," she says.
Marshall says water access keeps prices affordable on Scotland Island, as the island property market is limited.
Most residents rely on the 30- to 45-minute ferry trip or their own boat to get to the mainland.
But Queensland island property creates its own premium prices as lifestyle seekers pay extra for the dream of owning a resort-like waterfront property. Record prices have been achieved on the Gold Coast's Hope Island, which is only 45 minutes from Brisbane and where waterfront land sells for $900,000 and up.
"We are technically an island but it's only a 50-metre drive over a bridge to get to it," sales manager David Small says. "We're surrounded by a creek and a river." Hope Island's easy access and tourist-quality infrastructure - which includes a golf course, restaurants, marina and Sanctuary Cove - ensures property prices remain strong. The record sale price is $9.39 million for a five-bedroom waterfront home.
Coldwell Banker Barrier Reef Realty's Nicholas Slatyer says islands in Far North Queensland have their own prestige niche and often achieve record prices, compared with mainland properties.
He sold a one-hectare parcel of Zuna Island in Torres Strait - "which is about as remote as you can get in Australia" - for $550,000. The property is only accessible by helicopter chartered from Horn Island, two hours north of Cairns.
"The island market can be very quiet for months and then a person will ring and want something straight away and be prepared to pay for it," he says.
"These aren't people who need to worry about interest rates or getting their finance organised - they buy what they want." Slatyer has also sold some of the seven freehold properties on Bedarra Island, which require a $1500 helicopter ride or a $200 water taxi from South Mission Beach to reach.
"The remoteness of an island inhibits as much as it excites," he says. "To be honest, the prices on Bedarra are about the same as they are on the mainland for a house with equivalent views." On Hamilton Island, one of only two Whitsunday islands where property can be bought, price growth for units has averaged 22.5 per cent over five years, while lodges have averaged 19 per cent over the same time.
PRDnationwide research analyst Michael Martin says investors are buying the leasehold properties to use, as well as rent out. "A growing number of people choose to make their property investment a lifestyle investment as well," he says.
Further south on Magnetic Island, which has a large number of houses and a population the same size as Port Douglas, the prices are cheaper than adjacent Townsville.
First published by Domain.com.au on April 30 2008
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