Holiday Homes: Prices Slashed

The tide has finally turned on the holiday home market in south west WA.

Perth’s millionaires are finding it hard to move their second (or third or fourth) homes. Dunsborough, the premier town of the region and conveniently close to the Margaret River wineries, has seen the median house price fall 11.4% to $655,000 in the year to June. It might be worth remembering that as recently as 2003 the median house price in Dunsborough was $252,000.

Only 30% of Dunsborough property is owned by local residents: the vast majority of property owners are based in Perth, 2.5hours north of the town. Dunsborough is pure holiday town and holiday towns are often the first to feel the winds of change in real estate as very few people actually need a holiday home.

Holiday homes for sale Dunsborough Beach, WA

There are about 300 homes for sale, 100 more than at the same time last year, so it appears not just interest rates but also the sharemarket woes are having an effect on the holiday home real estate market.

Margaret River, inland from Dunsborough has not yet seen such a dramatic drop in house prices as Dunsborough. House price growth was still 12% for the year to June but agents are cautious and far from optimistic.

Further north the Busselton market is still rising too, but only just with growth of 1.4%, after showing average growth rates of 22% for the last five years.

So although the party may finally be over for the SW – its been a pretty good party for a very long time.