Holiday Home: Perth vs NSW

Building a Holiday Home in Perth vs New South Wales

This article exists because we get asked the question more than you’d think: “If we’re going to put money into a second home as a long-term family holiday house — and possibly let it out when we’re not using it — should we look at Perth, or stay east in NSW?” Mick has friends on both coasts and has stayed in plenty of holiday homes in both states, so he ended up writing this one. It’s the honest non-realtor version of the conversation.

Quick framing first: this isn’t an investment-property article. Holiday homes are bad investments measured purely financially — you’ll usually do better with a vanilla index fund. The reason people build or buy them is the lifestyle and the family memories. That said, if you’re going to spend the money, you might as well understand which state suits your actual use pattern.

The fundamental question: how often will you actually be there?

This is the first thing we ask. If you live in Sydney and you’re looking at a holiday home on the NSW south coast or the Central West, you might realistically be there 25–40 weekends a year. That changes the maths entirely. If you live in Sydney and you’re looking at Perth or Margaret River, you’ll be there four times a year if you’re disciplined, twice a year if you’re realistic.

A holiday home you visit 30 times a year is part of your life. A holiday home you visit twice a year is essentially a small business with very high emotional cost. Both can work. They’re different things.

The case for NSW (if you’re east-coast based)

For an east-coast family, NSW makes obvious sense for use frequency. The south coast from Berry to Mollymook is two hours from Sydney. The Blue Mountains is 90 minutes. Jervis Bay, Port Stephens, the Central Coast, the Hunter — all driveable for a weekend.

What that gets you that a flight-required destination doesn’t:

Spontaneous weekends. The whole point of a holiday home is the “Friday-night-decide-let’s-go” trip. Driveable does that. Flying doesn’t.
Easier ongoing care. You’re there often enough to notice the small things — the gutter that’s blocked, the door that’s sticking. Long-distance properties get expensively neglected.
Letting it out is easier to manage. A two-hour drive to deal with a guest complaint, a broken oven, a forgotten key — doable. Same problems from a flight away are expensive and stressful.
School holiday flexibility. You can drop the family there for two weeks and commute, or join them on the weekends. From Perth, that’s effectively impossible.

The NSW coastal market is also genuinely deep on rental demand. School holidays, long weekends, surf season — a well-located NSW holiday let near a beach can be earning 30–45 weeks a year if you’re organised. The downside is the price of entry: the south coast and Northern Rivers have both seen significant price growth since 2020.

The case for Perth and WA (if you’re west-coast based, or visit often)

Perth holiday homes are a different proposition. The market is real, the lifestyle is excellent, and for someone genuinely based in WA — or someone with strong family or business ties that take them west several times a year — it can be exactly the right call. The Margaret River wine region, Dunsborough, Yallingup, Rockingham, Mandurah and the Rottnest Island holiday rental market all have established holiday-home cultures.

What Perth has that NSW doesn’t: a slower-paced lifestyle, generally lower property prices outside the immediate suburbs, exceptional beaches with a fraction of the crowds, and the Indian Ocean sunsets. If you have family in WA, or your work takes you west regularly, the lifestyle case is real.

What it doesn’t have, if you’re east-coast based: weekend usability. The flight is four to five hours, plus airport time. School-holiday peak airfares are punishing. By the time you’ve done the airport-flight-pickup loop twice, you’ve eaten the first day of a four-day trip. Most east-coast-based families we know who built or bought in WA ended up selling within five years because the use frequency just didn’t justify it.

The maths nobody runs honestly

The standard pitch on a holiday home is “the rental income covers the costs”. Sometimes it does. Often it doesn’t, once you’re honest about the inputs:

Council rates, water, insurance: $3,000–$6,000 a year for a typical coastal house. Holiday-let insurance is more than regular landlord insurance.
Property management fees: 12–20% of gross rental income if you use a holiday-letting agent, plus cleaning fees per turnover.
Maintenance: Coastal properties weather hard. Budget 1–2% of the property value per year for upkeep.
Periodic refresh: Furniture, white goods, paint, the lot. Every five to seven years you’ll need to spend $20–$50k freshening the place up to keep the rental rate.
Land tax: Both NSW and WA have land tax above certain thresholds. The thresholds and rates differ. Get advice from a property accountant.
Your own usage: The weeks you stay are weeks you’re not renting it. The honest weekly cost of your family holiday is the rental rate you forewent, plus the upkeep proportional to your use.

Run those numbers honestly and the “the rental income covers the costs” pitch usually requires the place to be let 35+ weeks a year at peak-season rates. Achievable in some markets — the popular NSW coastal ones, the Margaret River region — but not guaranteed and not passive.

Build vs buy

The other framing in the original question was “building”. We’d be cautious on that for a holiday home unless you have a strong reason. Building gives you exactly what you want, but:

Construction in regional or coastal areas is significantly more expensive than in the metro markets, due to trades availability and freight.
The build period is 18–36 months for anything substantial. That’s a lot of unused-asset cost.
Building in coastal NSW means dealing with BAL (bushfire) ratings, coastal-zone planning controls, and increasingly stringent flood overlays.
You’ll cop the GST hit on a new build that you wouldn’t on an existing house.

If you have your heart set on building, that’s a real and reasonable choice — just know what you’re signing up for. Buying an existing place, even if you do a $100–$200k renovation, usually delivers a holiday home faster and with less risk than starting from scratch.

What we’ve seen go wrong

A few patterns we’ve watched friends fall into. The first is buying in a town you’ve only visited in peak summer, then realising the place is empty and rainy for nine months of the year. The character of a place out of season is what determines whether the holiday home keeps getting used. Visit in July before you sign anything.

The second is over-capitalising on the build or renovation. The temptation to put in the dream kitchen, the timber decks, the high-end finishes is real. But a holiday house lives a harder life than a primary residence — tenants who aren’t you, kids on sandy feet, ten years of weekends — and high-end finishes don’t survive it well. We’ve seen $1.2 million spent on a south coast renovation that needed another $250k of refresh after seven years.

The third is the “we’ll just rent it out when we’re not using it” assumption. Holiday letting is a business. Cleaners need managing. Damage happens. Guest expectations are higher than you’d believe (one bad review tanks the booking calendar for three months). If you don’t want to run a small accommodation business, use a professional manager and accept the 15–20% fee, or just don’t rent it out and call the place a pure family home. Trying to do letting yourself from a different city is usually the worst of both worlds.

Our honest recommendation

If you live east and you’re asking the Perth-vs-NSW question, NSW is almost always the right answer for a holiday home you’ll actually use. The only exception is if you have a genuine ongoing reason to be in WA — family there, business there, or you grew up there and that’s where home really is. In that case, the WA case is good.

If you do go east, our suggested approach: rent in two or three target regions for a long weekend each before you commit. South coast, the Blue Mountains, the Hunter, the far north, the Snowy Mountains. The right region for your family is the one you’d genuinely want to be in for ten days in winter, not just three nights in summer.

For the legal and tax framework, the NSW Government housing portal is the official starting point for NSW-side regulations, and the WA Government services portal is the equivalent for any WA enquiry. A property-focused accountant and a solicitor in the state you’re buying in are essentials — both states have specific rules around holiday-letting income, GST treatment, and land tax that catch out-of-state buyers off guard.

Beth’s parting line, which we’ve had to remind a few friends of: the holiday home is the lifestyle, not the asset. Pick the place where you’ll actually spend the time, build the memories, and let the asset side look after itself.