Kangaroo Island Property

After touring Kangaroo Island (KI) early December last year looking at Kangaroo Island Plantations (KPT) timber plantations and proposed wharf at Smith Bay, it also appeared there may be an opportunity in property investment on the island - there are several catalysts to improve the economy and therefore house prices. 

Firstly, KPT is planning on exporting timber off the island. If this goes ahead it will create jobs. Not everyone agrees on where the timber should get off the island, but everyone agrees it needs to happen. Secondly, the airport is getting upgraded and lengthened so commercial jets can land/takeoff. This means that jets could fly direct from Sydney and Melbourne. This doesn't just mean more tourism, but people could work in Sydney for example during the week and fly to KI on the weekends. The house price differential is enormous. And recently a new resort application has been approved.

There is minimal permanent rental property on the island. We visited the Century21 office at Kingscote and there were only four properties for rent! 

So the upside case here is a jab-in-the-arm for the economy from the infrastructure projects and a 10%+ escalation in population along with minimal rental property could lead to higher rents and higher prices. 

There are some potential downsides, of course. Projects may not go ahead. Commercial jets may not fly into KI. There appears to be quite a number of unused houses on the island - there are a lot of weekenders and short term holiday letting property on the island. How much of this would convert to full time rental property if the population increases is a question I don't know the answer to. And KI will always be more expensive and isolated than the mainland: it won't appeal to everyone. 

I didn't draw any specific conclusion as to how or if property prices will move, so if you're thinking of that strategy you would want to look into this in detail yourself. The agent I spoke to was extremely helpful - contact me if you would like his details. 

Kristian 

Disclosure: own KPT