My feeling is that when you move away from straight residential you get more exposed to seasonal factors and things like the pilots strike back in the 80's, that hit QLD hard. Also the high Aus dollar atm is allowing more people to holiday overseas. That will be another reason why interest rates will be pushed down.
Do they appreciate?
The less land component the more you are open to other influences in this regard. I have seen some holiday apartments where little capital appreciation was seen for very long periods. It is after all more of a business than a residential property investment and more open to the vagaries of business health. You move away from the "must have a roof over your head" market and more to the discretionary spending market. The returns should compensate you for that risk, 5% wouldn't cut it for me.
Sorry to be negative, I just wanted to be straight with you about my feelings. I could be totally wrong.
