Australia’s property market has received a resounding vote of confidence on the global stage, with new research declaring the nation the second-best country in the world for holiday home ownership.
According to an extensive index from home loan experts Compare the Market, the Land Down Under outshone more than 40 other countries, scoring an impressive 7.46 out of 10 for its tourist appeal.
The study meticulously analysed 50 global destinations based on crucial factors like affordability, climate, and lifestyle amenities, pinpointing the most attractive locales for acquiring a holiday home.
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While Cyprus narrowly pipped Australia to the top spot with a score of 8.25, Australia comfortably outranked popular European hotspots such as Malta (7.11), Italy (6.91), and Greece (6.76) in the top five.
Top 25 global holiday home hotspots. Source: Compare the market
Australia’s stellar performance was largely driven by its enviable climate and vibrant lifestyle offerings.
The report highlighted Australia’s exceptional weather, ranking third globally for average monthly rainfall (a mere 36.94mm) and a delightful seventh for average temperatures, sitting at a balmy 22.8C.
Combine these sun-drenched days with a thriving culinary scene – boasting 405 restaurants per 100,000 people – and it’s clear why Australia presents such an irresistible proposition for holiday home buyers.
Australia has plenty of holiday homes and celebrity landlords. Among them is singer Daniel Johns of the band Silverchair who leases his Merewether Beach home to holiday makers.
The home comes with ocean views and a colourful interior. Source: Airbnb
Stephen Zeller, General Manager of Money at Compare the Market Australia, emphasised the strategic considerations involved in such an investment.
Australia’s top holiday hotspots include the Gold Coast, Sunshine Coast, Port Douglas and celebrity hotspot Byron Bay, alongside rising stars like Tasmania’s Launceston, Victoria’s Yarra Valley and Daylesford, and Western Australia’s Margaret River.
Megan Gale has also embraced the holiday home market, having invested in a property in Daylesford. Picture: David Caird
“Buying a holiday home is about more than just finding a beautiful location; it’s about making a smart financial decision,” Mr Zeller said.
“Affordability is a key factor, as is weather and lifestyle amenities. Italy, for example, offers accessible housing prices compared to other European nations, which can make financing more manageable. That’s where comparing home loan options becomes crucial.
“Whether you’re purchasing for personal use, rental income, or a mix of both, comparing home loans can give you a clearer picture of your borrowing power and help you make informed decisions.”
New tax rules that could cost owners thousands
Aussie holiday home owners are facing the possibility of losing tax deductions under new ATO rules targeting properties not available for rent during peak seasons.
Chartered Accountants ANZ (CA ANZ) has flagged the possible changes to the taxation of holiday homes following a new draft guidance from the Australian Taxation Office (ATO).
From July 1, 2026, certain holiday homes may be treated by the ATO as ‘leisure facilities’, preventing homeowners from claiming deductions for interest, rates or maintenance, unless the holiday home is mainly rented out to generate income.
The move comes as the tax office seeks to ensure that properties claiming deductions are truly investment vehicles, not just personal playgrounds.
The Australian Taxation Office has commenced using artificial intelligence to identify holiday home owners who are incorrectly claiming tax deductions, warning that properties not genuinely rented during peak periods will lose their tax breaks.
It is estimated more than two million investment properties claim tax breaks each year, with the average deduction hovering around $20,000 in previous years.
Heather Moore, head of accounting and tax at Knight, told Yahoo Finance that the ATO’s new guidance is a clear signal to holiday home owners who have blurred the lines between personal use and legitimate rental income.
“They’re pinning it down to peak periods, because if that was a true income-generating investment property, then owners would be maximising the earning ability of that property,” Moore said.
“(This) would mean hiring it out for peak times, so school holidays, Christmas, Easter, potentially even if it’s in the centre of Melbourne around footy finals, that sort of thing, rather than having it available for personal use and for friends and family use instead.”
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