We can break the lifestyle purchase into two types of property.
- The holiday home on a structured suburban block at the beach or in the country.
- The rural retreat/hobby farm, usually 5-100 acres.
Before buying, it is always good to ask yourself why? How often will I go? How old are my children? Do they play Saturday morning sport? Will they want to go there when they are older? In Europe, when investing in real estate, it is rarely sold. It is passed from generation to generation. This concept is relatively new in Australia.
This is called stewardship or legacy buying. Thinking about an asset with a generational mindset ie children and grandchildren.
There are many factors to consider. Can I walk to the beach/shops/cafes? In Summer, parking in Sorrento and Portsea is almost impossible. Can I walk to these amenities?
In Sorrento and Blairgowrie, it is difficult to buy a home that doesn’t require work under $1,500,000. In Portsea it is higher. The clifftop is exclusive and starts at $10,000,000.
What has changed is the Mornington Peninsula is no longer, simply a lifestyle choice location. It is both lifestyle and a high performance investment that if you choose wisely, will appreciate just as well or higher than a similarly priced real estate asset in Melbourne.
In Lorne, Aireys Inlet, Fairhaven, Anglesea and Barwon Heads too, whilst cheaper than the Mornington Peninsula, they are becoming strong investment locations. I expect this trend will continue.
Increasingly, hobby farms and rural retreats are becoming popular post COVID.
For example, 100 acres in Flinders is currently on the market for $10,000,000. In Red Hill, Red Hill South, Merricks North, you can easily pay $1,000,000 to $3,000,000 for an acre of land. 3-5 acres typically sell in the range of $3,000,000 to $4,000,000 with a modest house depending on whether you have a south or north facing view in this area.
The Bellarine Peninsula looks more affordable compared to similar rural zoned land on the Mornington Peninsula. I particularly like the hinterland hamlets and townships at the back of Lorne. Pennyroyal, Birregurra, Forrest, Deans Marsh, Bambra, Boonah and Barwon Downs. These farmlets have high rainfall and suitable for many land uses including cropping, viticulture or grazing livestock such as venison, cattle and sheep. Small wineries, breweries, food produce and craft are starting to open up and I can see high potential for tourism throughout the expansive Otway Ranges. Typically, land is cheaper in the range of $15,000 to $20,000 per acre for 50-100 acres. The upside on the Surfcoast is huge, not to mention some of Victoria’s best surf beaches. Hobby farms less than 100 acres look undervalued compared with comparable property on the Mornington Peninsula and accessibility has improved greatly by new and improved freeway access.
If buying rural land, I recommend getting a farm management plan undertaken by an agronomist. It is important to understand soil type, condition of pastures, pest and weed infestation, water, fencing, paddock composition and examining suitable land uses.
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