The luxury coastal life, on the cheap

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By Megan Tidd

Byron Bay may be best known for its wide, laid-back beaches, where wealthy celebrities and hippy surfer-types flock to catch its bounty of proud, even waves. For property investors, though, it may soon become more famous as a centre for cheap buys.

According to RP Data property analyst Cameron Kusher, luxury coastal homes are being heavily discounted by desperate sellers.

Byron Bay isn't the only one offering great deals for investors: riverside South Perth in Western Australia and Paradise Point in Queensland are being discounted by more than 17 percent, as wealthy owners shirk off holiday homes in the economic downturn.

Find property hot spots with the Price Mapping Tool

"As high-net-worth individuals feel the pinch of dramatic falls across equity markets, [they're registering] lower than anticipated bonuses and in some cases job losses, the holiday home or other discretionary assets are usually the first to go," Kusher said.

In Byron Bay, itself, luxury houses are being discounted by 17.3 percent, on top of a 16.7 percent drop in local prices in the past 12 months. Kusher believes knowing the average discount level is an important negotiation tool for investors.

What to look for in an investment property

"The average discount level is an important indicator as it provides a guide to sellers as to how much their property is ultimately likely to sell for. For the purchaser it indicates how much negotiation power they may have in a given market. The level of discounting also reflects the current performance of the market," he said.

While wealthy, economically struck owners rid themselves of extra baggage, it may be a fantastic time for investors to look towards the coast, where the beaches are wide and the waves are steady.

Here's a look at five discounted coastal suburbs, according to the Price Mapping Tool:

Byron Bay, New South Wales
Best known as a celebrity getaway and hippy surfer hangout
Population (2006 Census): 5609
Median weekly rental rate: $475
Gross rental yield: 3.80 percent
Find out more with the Price Mapping Tool

Paradise Point, Queensland
Best known as: nesting spot for newlyweds and nearly deads
Population (2006 Census): 5115
Median weekly rental rate: $600
Gross rental yield: 4.02 percent
Find out more with the Price Mapping Tool

Hove, South Australia
Best known as an English-style seaside town, sister to Brighton in the UK.
Population (2006 Census): 2781
Median weekly rental rate: $385
Gross rental yield: 4.25 percent
Find out more with the Price Mapping Tool

Wangi Wangi, New South Wales
Best known as a mooring for posh yachts on Lake Macquarie.
Population (2006 Census): 2772
Median weekly rental rate: $280
Gross rental yield: 4.53 percent
Find out more with the Price Mapping Tool

San Remo, Victoria
Best known as an oasis for Melbournian day-trippers and entry-point to Phillip Island.
Population (2006 Census): 1016
Median weekly rental rate: $240
Gross rental yield: 3.26 percent
Find out more with the Price Mapping Tool

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