Holiday homes regain momentum

The holiday home market around Sydney is finding its feet again following the tremors of the global financial downturn, according to Herron Todd White.

The firm's April 2010 Month in Review report notes holiday home markets were among the worst hit during the global financial crisis (GFC), as discretionary assets are usually the first to be offloaded in times of hardship.

But the market is looking more stable in the early months of 2010.

"Overall it's considered confidence is returning to the holiday home market within Sydney, as Australia's economic strength solidifies, overall business confidence continues to grow and those with the cash can take advantage of weakened conditions and realistic vendor expectations," the report notes.

The high-end Palm Beach market in Sydney suffered falls of up to 25 per cent in value in the wake of the GFC, it adds, but as high-flyers are again taking home bonuses, confidence is re-emerging.

Still, it notes, "purchases can still be made well below previous market levels".

"Where there were signs of an oversupply of holiday homes on the market throughout Palm Beach, supply and demand appears to again (be) equalising," the report says.

"Value levels still remain below previous highs, encouraging those in a strong position to take advantage of weakened conditions."

The mid-range Blue Mountains holiday markets of Leura, Katoomba and Wentforth Falls are also seeing a return of confidence.

"Activity has renewed recently after a long period of inactivity post the GFC," the report says.

"A stabilisation of the Sydney prestige market has seen a trickle-on effect on the holiday house market in the region."