Beach vs. City: Where Should You Invest in an Australian Short-Term Rental?

Across Australia, regional markets offer different strengths depending on property type, guest demand, and seasonal timing. Urban listings provide steady bookings year-round from business travellers and tourists. Coastal homes, by contrast, bring higher returns during peak seasons but face quieter months with lower occupancy. This guide explores the best Short-term-rental (STR) investment locations in Australia and what to expect from beach and city markets.

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Quick comparison: Beach vs. city STRs

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Both city and coastal short-term rental markets can perform well, provided your strategy suits the destination. In urban areas, steady bookings from tourists and corporate travellers result in a more stable ROI.

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Coastal properties, however, reflect different vacation rental trends. During peak seasons, they draw guests willing to pay a premium for upscale settings and proximity to the beach. Outside of holiday windows, though, demand tends to drop.

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To scale your profitability, you want to weigh which location offers more room to grow across the year.

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Table 1: Quick comparison: Beach vs city STRs

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Real-time financial comparison between beach vs. city STR investment

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Returns in short-term rental markets differ. Location, seasonality, and booking behaviour all influence revenue patterns. Taking the time to compare how coastal and city properties perform will help you align strategy with real-world outcomes. With accurate data, you can choose the best STR investment locations in Australia that meet your investment goals.

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Beachfront and coastal STR considerations

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Coastal STR listings consistently show strong summer performance, especially in regions such as Bunbury and the Gold Coast. Their beachfront positioning allows for higher nightly rates during peak travel seasons.

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Guests booking luxury vacation rentals often favour these homes for their proximity to the exclusive outdoor settings. That includes walkable beach access, upgraded features, and posh layouts tailored to families or couples.

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Some recent figures show that average nightly rates are above AU$350 in many coastal areas. This reflects strong demand and consistent market growth.

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While renting a beach house can generate significant revenue, it often requires strategic planning. Maximising income in these areas depends on adapting to seasonal trends and pricing opportunities across the calendar.

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Pros

• Strong nightly rates are common, especially in coastal markets with high seasonal demand.
• Peak periods such as Christmas and Easter often lead to sharp booking increases in beachfront locations.
• These properties attract guests willing to pay more for premium settings and high-end amenities.

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Cons

• Seasonal dips in occupancy can make earnings unpredictable across the year.
• Renting a vacation rental in high-end markets often requires more capital due to steep upfront costs.

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Table 2: Financial comparison for coastal region

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City STR Considerations

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STR properties tend to perform with greater consistency in major metro areas such as Sydney, Melbourne, and Perth. These homes draw diverse guests; interstate professionals to international visitors, which helps reduce seasonal dips throughout the year.

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One of the core advantages here is infrastructure. Unlike coastal homes, city properties aren’t exposed to salt air or heavy weathering. This means fewer repairs, which can boost profitability over time.

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Nightly rates may sit below those of coastal listings, but the high occupancy can offset this gap. As of June 2025, Sydney properties had a vacancy rate of 1.6%, which indicates a solid market.

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As demand in urban areas stays active, hosts must refine their pricing strategy to remain competitive. Those who track guest behaviour, event calendars, and local competition are more likely to generate better returns.  

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 Pros

• Revenue is generally more consistent throughout the year, with steady demand from business travellers and leisure visitors.
• City-based properties usually cost less to maintain, thanks to better infrastructure and protection from coastal weather impacts.

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Cons

• Nightly rates in city markets are often lower than those along the coast. This means a higher occupancy volume is needed to match beachside revenue.
• Competition is much tougher in metro areas. Hosts need to work harder to attract bookings and maintain strong performance.

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Table 3: Financial comparison for urban region

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How to evaluate your property value with ease

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Projecting future returns can feel uncertain, especially when market conditions shift faster than you can respond. Even worse, relying on estimates or outdated data can lead to missed income opportunities.

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That’s where Beyond steps in. The platform offers dynamic pricing built around live booking trends, seasonal demand, and local events. It learns from your listing and adjusts in real time to keep your rates competitive.

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With better visibility and more innovative tools, you stay in control of your income from the start. Try the free short-term rental data tool today and take the guesswork out of your next investment.

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