Moreton Island’s property market has seen remarkable changes over the past decade. The median house price has surged by 140 percent, elevating the average home value to approximately $1.25 million.

Shifting to the New South Wales south coast, the stretch of land between Callala Bay and Currarong spans 15 kilometers and exhibits a 48 percent vacancy rate. This area has experienced a significant property value increase of 126.8 percent over the last ten years, bringing the average home price to $1.15 million.

Source: SBS News / Madeleine Wedesweiler

Vanessa Rader, Ray White’s head of research, said the report revealed Australia’s holiday home phenomenon had a concentrated geography, and these areas challenged fundamental assumptions about property investment returns.

“I think it permanently boosted demand for homes in scenic and lower-density areas,” Powell said. “When you look at these regions, they cater for both second holiday homes, but also short-term letting as well.”

But looks — even pristine and coastal — can be deceiving.

What other considerations are there?

But perhaps the most significant concern is that many areas with high vacancy rates experienced environmental risks beyond what most traditional residential investments faced — and thus, higher insurance premiums.

“If you’re unsure of what the risk is associated with the home that you’re looking at, the quickfire way to find out is to get an insurance quote. The premiums really do tell you the risk profile.”

Is the bubble bursting?

With climate change continuing to intensify risks like rising sea levels and extended bushfire seasons, Rader said the long-term viability of homes in these scenic — but vulnerable — locations was also increasingly threatened.

“That market would really just cement itself as being a tourism destination first, more than a residential location. But people do need to live in these places, too,” she said.