A twist-filled Christmas-themed horror-comedy that riffs on Home Alone, the movie was conceived and written as an American tale and was all set to be made in South Carolina until director and co-writer Chris Peckover's??? passport became a factor.

"My mum is from Nowra," Montreal-born, LA-based Peckover says. "I've always had a passport and I've visited briefly to see my grandma, but I had never lived in Australia until last year when we shot the film. Now I want to live there. I had so much fun."

Peckover was about to finalise a deal to shoot the movie - his second feature - for half a million dollars in the American south when a contact put him in touch with Australian producer Brett Thornquest???.

"When he got wind I was an Aussie citizen he kind of broke down my door and said, 'Do not sign any documents. We will make it for $3 million'. And that was that."

Thornquest's company Storm Vision has begun to carve out a small and relatively under-exploited space in the local film market: making low-budget genre movies intended primarily for international consumption. Many have tried over the years, not all have succeeded, but Thornquest saw in Better Watch Out - in which a couple of teenage boys and their female babysitter are terrorised one Christmas Eve - a real opportunity.

"The movies that crack the Australian market tend to be family comedies or well-made movies like Lion or The Dressmaker," he says. "Not everyone can make those, they take a bit of magic. But genre films typically tend to be on the smaller side and the audience doesn't expect them to look like $150 million movies. Smart genre films just have to be really good at what they do, and if they are they can really pop."

There are two American actors in Better Watch Out: Patrick Warburton (Puddy from Seinfeld) and Virginia Madsen (Sideways) as the parents. Otherwise, the cast is all Australian: Levi Miller (Red Dog: True Blue, Pan, Jasper Jones) as their precocious 12-year-old Luke; Ed Oxenbould??? (Paper Planes, Puberty Blues, Alexander and the Terrible, Horrible, No Good, Very Bad Day) as his best friend Garrett; and Olivia DeJonge??? (Hiding, The Visit) as their 17-year-old babysitter Ashley. Dacre Montgomery - so hot right now, thanks to his role in the second season of Stranger Things - is in it too.

"I was initially worried about casting just out of Australia, worried about the size of the casting pool," Peckover says. "Little did I know that there's something in the water Down Under."

The crew was all Australian as well, and that, combined with Peckover's Australian lineage, was enough to qualify the film for the producer offset, the scheme wherein 40 per cent of a film's local production costs can be recouped through the tax system.

You might say that as far as dual citizenship goes, it was a rare example in recent times of a good news story.

Despite the ingredients coming together, Peckover wasn't immediately convinced of the case for making the movie in Australia. It was a Christmas movie for heaven's sake, with snow and sweaters and fireplaces, and they were going to make it in Australia in January and February 2016. "My question was always how on Earth are we going to do this on location." The answer: We're not. We're going to build it in a studio.

Unfortunately, seven of the eight sound stages at Fox were already being used by Mel Gibson's Hacksaw Ridge, leaving only the biggest and most expensive one for Better Watch Out.

"That really put us in the hole," Peckover says. "We were a quarter of a million dollars behind budget before we even started shooting."

To stay within budget they clawed costs back wherever they could. "Little things, like we were only able to afford two hours of air-conditioning every day, even though it was summer and all the actors were wearing winter clothes under hot film lights. I can't describe to you the agony of that shoot, especially for them."

It was all worthwhile though. Thornquest says the movie has been sold to every country in the world except China. And after seven weeks on home release in the US it is still "in the top 20 horror movies on iTunes", far better than anyone expected, according to Peckover. It opens in the UK on more than 150 cinema screens next week. The investors are happy and Peckover is already planning to come back to make another film.

There is one disappointment though. "One of the smallest releases we're getting is in Australia, which really shocked us and [distributor] Universal," says Peckover. "Cinemas were saying, 'genre doesn't play well in Australia; it's more an arthouse thing'."

So, do you have any advice for Australian filmmakers who might look to do what you have? "If you want to be a genre filmmaker you have to think more broadly than Australia because genre films just aren't as valued Down Under as they are elsewhere," Peckover says. "They're looked down upon."

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