Cairns Sales Volumes Increase, Prices Still Slipping

There seems to be a pick-up in listings in the last few weeks with many buyers revelling in the fact that they have an increasing choice of properties to view, putting even more pressure on our sellers to reduce their expectations of price on their properties to be ahead of the competition. This is not a trend we were hoping for as Cairns properties continue to languish at 2005 prices. It seems many sellers are finally giving up on the hope of an improvement in the market and pressing on with life plans. Life does go on, people get older, families grow out of their homes, many scale down, circumstances change. An interesting fact is that at any given time, 3% of people are either in buying or selling mode. A return to normal stock levels will definitely have some sort of impact on our prices and with so many variables in the global and domestic outlook, it is anyone’s guess as to what to expect in 2013.

Cairns in summary for November:

·         Volumes of sales are still increasing, though prices still falling

·         Medium house price is $330,000, a reduction of 3.7% since the same time in 2011

·         Medium unit price is $179,000, a 4.4% reduction since the same time in 2011

·         Rental vacancy rate for houses are at 1.3%, units 2.5% (Overall 1.9% - down from 2.4% last month)

·         Building Approvals return to growth with a 24% increase in the past 12 months

·         Since 2008, Mortgagee in Possession & Receivership sales accounted for a trend level 13.6% of all residential sales in September 2012

 

 

To keep your finger on the pulse, the November Herron Todd White Cairns Watch Property Report has just been released. You can find it here: http://www.cairnswatch.com.au/uploads/uploads/201211property.pdf

We are still experiencing good numbers through advertised Open Homes, in fact I had over 60 people visit an acreage property last Sunday! On average 4-5 groups through most Open Homes. Real estate is a numbers game, the more people through, the better chance of selling but unless the advertised price is within 10% of where the buyers are, we are wasting our time. Buyers have become “internet intellectuals”, more prepared and more informed than ever.

The year has ended with plenty of action and very pleasing results in comparison to last year. It is now cheaper to buy than to rent and interest rates are at an all-time low. As long as the prices are right, there are plenty of buyers about and that’s the way we like it!

Have a great week!

Cairns still sitting at the bottom of the Property Cycle

The latest figures for Cairns residential property are out for October, compliments of Herron Todd White Independent property advisors.

Property continues to turn over at a much greater rate than 12 months ago but the prices are still slipping away from us. The August 2012 Cairns median house price came in at $331,000, a 3.7% reduction since August 2011. The median unit price is also struggling, reducing to $178,000 in August 2012, a 6.9% reduction since August 2011.

Rental houses continue to show very tight supply as a result on on-going demand and the absence of new supply, but the shortage of units appears to have alleviated in recent months.

The trend vacancy rate for houses stood at a very low 1.7% during September 2012, while units displayed a trend vacancy rate of 2.9%. The overall market vacancy rate stood at 2.4%.

Rental housing shortages have resulted in escalated rents across all categories of housing over the last 12 months. Between September 2011 and September 2012, the weighted average median rent

increased from $325 to $350 per week for houses, and from $240 to $255 per week for units. Rents are likely to continue increasing during 2012-13 as the rental supply stays tight.

Building approval numbers staged a recovery in August compared to their very low July figure, highlighting the variations that have occurred during the course of this year from changing grant schemes, stamp duties, etc. Though the trend level has reverted back to 2011 levels, there is a perception that there may be underlying improvements taking place in the industry as the economy slowly recovers.

The Cairns market position remains unchanged on last month, wavering at the bottom of the property cycle. There are plenty of opportunities to pick up a great deal now as we begin to enter the slow recovery phase.

If you are interested in reading the full Cairns Watch report CLICK HERE: http://www.cairnswatch.com.au/uploads/uploads/201210fullreport.pdf

Have a great week!

Chinese Boost For Cairns – More Residential Investment Needed

The town is buzzing this week with the very first flights direct from China to Cairns touching down at the International Airport. As mentioned previously, these flights will be coming in 3 times a week in the coming months, rising to daily services during a trial period, opening up a fresh tourism market we are very much in need of to help reignite the regions tourism industry and regional economy. It was amusing listening to the radio this morning and hearing that many of these Chinese being interviewed at the airport were previously not even aware of Cairns existing! We saw similar activity with Japanese tourism in the 1980’s. The injection of foreign investment at that time was phenomenal. Business leaders are hoping for a similar effect in the coming months to help strengthen Cairns position as the “Asian Gateway To Australia”. Even without the impact of these extra flights, Chinese visitors to Cairns were up 40% last year.

 

From a real estate point-of-view, this is all pretty exciting as more tourism creates more demand for jobs and services…and it’s a fact, everyone needs somewhere to live! After a 5 year downturn in building approvals, the time is also almost right to create affordable products for FIRB (Foreign Investment Review Board) approved buyers. There are very few investment opportunities for these people and like it or lump it, investment of residential property is critical for the well-being of our communities. Can tenants really afford to pay increasing Cairns rents as demand overtakes our accommodation supply? As property guru Michael Yardley pointed out recently, our government provides public housing, but not enough for those who can’t afford to buy their own property. In the past few years, local investors have slowed in the purchase of residential properties in Cairns. It is only the private rental market that can deliver rental accommodation at the rate and scale that is needed at present. Foreign investment would be a great help but, let’s face it, it is certainly an opportune time for Aussie Mum & Dad investors to snap up the great deals on offer in Cairns.

 

Have a great week!  

Cairns is Improving!

The latest Herron Todd White Report is out! Cairns is continuing to slowly emerge from its economic trough. In the brief report from our guru of Herron Todd White, Rick Carr, the most gratifying result has been an increase in employment, and although unemployment is higher, even that gets a positive spin – more people coming out to look for work as they perceive the economy to be improving. Coupled with perceptions of a much busier tourist season this year and with direct flights into China about to commence, there is growing confidence in the future of Cairns economy. If you are interested on the latest official stats and figures for our Cairns Region, click onto the following snapshot of the property market: http://www.cairnswatch.com.au/uploads/uploads/201209property.pdf If you are keen to see the overall picture about the economy, click here: http://www.cairnswatch.com.au/uploads/uploads/201209fullreport.pdf

Have a great week!

 

Cairns - The 2 Speed Property Market

The Cairns property market continues to languish on the bottom of the property cycle, with our saving grace being the lack of stock available to buyers. As I have mentioned before, we are experiencing a two speed property market with house prices somewhat stabilizing and the unit market continuing to splutter downwards. High insurance fees continue to plague the unit market and I'd love a dollar for every person wanting to have a whinge about our Cairns Regional Council rates.

The entire market is being driven by price!

Only yesterday I adjusted the price of a townhouse in Manoora listed at $145,000 down to $125,000 - It has been chaos on the phones. Three interstate offers within two hours. How can this be? The property has been on the market for 12 months! It just goes to show.

From a real estate agents position, the very worst thing that I can do is expose my sellers to a falling market. If you are a seller, listen to the market. Sorry, buyers are in control.

Recent studies show that until a property is within 5% of what buyers are willing to pay, they will basically ignore it, no matter how enticing it looks! You will find that this is why BIG impact real estate companies are selling via the auction method, whereby the property is judged on its merits and not just price. There is nothing like a "cash, unconditional" sale in a time where professional property valuers are confronted with a truly confused marketplace. Many a contract is terminated on valuation. Mortgagee in possession sales at rock bottom prices. An emotional buyer with a real desire to be at a particular address will pay a record price, whilst the real estate agent frantically runs about trying to find solutions to everyones problems!

Cairns unemployment is at 10.3% (Is it ????)....the population continues to grow at 2%. The rental vacancy rate is officially 1.8% (though I firmly believe it is now below 1%). For forty years, Cairns has run at a sustainable average of 2% until the GFC hit us five years ago. Low interest rates are certainly having an effect.

Its an exciting and opportunistic time for investors, with rock bottom prices, sky rocketing rents and not a great deal of residential developments in the future. The perfect storm is brewing!

Have a great week

Debbie

The Chinese are Coming?

I was interested to read this weekends local newspaper and note that is is not only real estate agencies searching to employ bi-lingual staff at present. Tourism and service companies share our quest as we gear up for an expected surge in the Chinese market. There has clearly been an increase in the number of Chinese buyers about seeking to secure good quality homes for their families in Cairns. They must meet certain criteria to buy property in Australia. I have personally not experienced the onset of investors to date.

In just over 2 months, the direct flights from China to Cairns begin. Are we about to experience a reoccurance of the heady days of the early 1990's when the Japanese were flying direct to Cairns resulting in one of the largest boosts to the local economy ever? We remain cautiously optimistic on that one. At least momentum is building, for for what appears to be the beginning of the upturn on the Property Clock.

When do we know it is on the bottom? When sales volume and sales values start going up! Sales volumes are definitely on the rise. Sales values?

We'll have to consult the buyers on that one!

Have a great week, Debbie

Plenty of Action in Cairns – We’re Excited!

What an exciting week it has been! Buyer sentiment has been high and the RBA announcing that the interest rates will remain at 3.5% will really feed that enthusiasm. Good crowds at Open Homes with Buyers remaining confident in their power that they hold “price wise”.

I get to speak with valuers, solicitors, building & pest inspectors every day. Most are reporting a marked increase in business, though it remains patchy with quiet spells now and then.

Its also surprising how many people searching for property come from the south. Many on the hunt for a good buy, many have sold or are selling in Adelaide, Melbourne & Sydney to begin new lives in Cairns. Why are they coming? Warm weather, relaxed living, moving to be close to family! Lots of reasons, the tropical lifestyle sure looks appealing!

Huge news this week with Cairns set to host 2,000+ delegates at the 2014 G20 Finance Summit. Julia’s scored a few brownie points for that. The Federal Government alone will be spending some $340 million on “infrastructure / support” and some of this will feed directly into our economy. The Cairns Regional Council will also be looking at plans for the city, surely its all positive.


Bruce Highway Upgrade



The proposed Ray Jones Drive intersection upgrade

Lots of action on two of the southern highway intersections with millions of dollars being injected into the new by-passes, built to cope with our increasing population.  Stage one of the Cairns Bruce Highway Upgrade is the $150 million upgrade of the Sheehy Road (Forest Gardens) to Ray Jones Drive section. It will improve safety and traffic flow, reduce congestion and enhance access for 55,000 motorists using the southern access into Cairns each day.

The announcement of new flights to & from China is another bit of good news for us.

There is always a party killer somewhere. The announcement that the Cairns Regional Council will raise rates by 3.5% this year has stirred everyone up. There have been many government job loses about town too.

All in all, Cairns is enjoying a new spring in its step as confidence returns. I was in Port Douglas on Friday night and could not believe the amount of tourists out & about. The pubs were full, people lining up at restaurants – what a change from 12 months ago……Wow! Cairns is much the same.

All this action has had no effect on real estate prices with plenty of owners still married to excessively high expectations of sale prices. We won’t pop the champagne yet. We are still at 2005 prices & it looks like we’ll be here for a while.

5 years on a downer has made us cautious…..but we are cracking smiles….Bring it on!

Have a great week, Debbie

How Exciting!!!

RE/MAX Australia Launches a Truly Global Real Estate Listing Site

www.global.remax.com, the first truly global resource for consumers, with hundreds of thousands of home listings in countries around the world has officially been launched here in Australia and is about to go live. The site features customised search tools that allow buyers to search for properties in 30 languages, translate currencies and find the latest international real estate news.

RE/MAX Australia agents are now able to provide a medium by which buyers can view their properties in their native language and currency, regardless of where they are located. Did you know that over 20% of Australian households do not use English as their first language? An increasing number of foreign buyers are looking for property in Cairns and throughout Australia, and vice versa. www.global.remax.com is essentially a one-stop source for residential and commercial real estate, no matter where you live.

RE/MAX has a presence in more than 80 countries, a global reach far greater than any competitor and the power of such a site of this scale will open the doors to international business. How amazing it will be for us to list properties for sale! We are all very excited about this new product available to us particularly in consideration of the number of Asian buyers that have recently been snapping up properties around our Cairns area. What I do love about these buyers, nearly all of them are cash buyers!

Have a great week, Debbie

An Opportunistic Time to Buy In Cairns

Still plenty of evidence rolling in showing we may well be at the bottom of the market. Residential Property Investors need to be prepared for the long term and pay close attention to their rental incomes. Some Property Management departments are reporting vacancy rates as little as 0.43% with houses sitting at 0.55% and units at a meniscal 0.34%. Yes, rents have to rise. The current median price of established houses is officially $343,000, according to the latest Herron Todd White Report, while units sit at $257,000, surprisingly high in consideration of the lack of new construction, volume in sales prior to July and the great losses many owners have had to wear after purchasing during the years from 2006 to 2007.

Herron Todd White reports there are positive indications of improvement, with growing tourism numbers and expectations of a renewal of building activity stimulated by rental housing shortages. Recovery has been, and will continue to be, slow progress.  The trend in new house construction is increasing, the volumes of sales increasing and the stage of the Property Cycle is at the bottom. Click here if you want to subscribe to the Herron Todd White Cairns Watch Report.

All good news when compared to this time last year. Bear in mind, we will not know where the bottom of the market is until it starts going up!

For all you renovators out there, there has never been a better time to pick up an old, tired, but well positioned property as we find an emerging trend of buyers who fit the mould of “DIFM” buyers. (Do It For Me) replacing the heady days of DIY’s (Do It Yourself) buyers. Many people are genuinely time poor and prefer a set-and-forget style of investment. If you are prepared to roll up your sleeves and get stuck into a renovation project, I’d be hanging around the weekend Auctions in the coming months! Remember, more millionaires were made in the great Depression than any time in history. Snap up a bargain, do your costing’s wisely and take advice from either a reputable real estate agent, or qualified valuer who can estimate the outcome once completed. If you want to get an idea of what is selling in your preferred area, send me an email requesting PRICEFINDER SHARE and I’ll hook you up to the back end of our market database via the internet.

Have a great week!  

Signs of a Turn In Cairns

What an exciting month this is shaping up to be in our Cairns marketplace! There has been an absolute buzz about with a big hit of pent up buyers slamming the market and snapping up bargains from the 1^st of July. 

As expected, the reintroduction of the Owner Occupier State Stamp Duty Concession has certainly given us a leg up, interest rates remain totally affordable and the lack of stock continues to frustrate buyers. It is interesting that many buyers, many of whom initially appear quite arrogant in the belief that they are indeed in control of the market, lose the smug smile, turning to dismay as multiple offers  begin to surface on well priced properties. Believe me, the majority of agents dread the multiple offer situation as it is always the real estate agent perceived to be the bad guy who has to give the bad news to the buyers who miss out! Several buyers are now missing out on their dream homes hoping prices will continue to slide.

I’d love a dollar for every person that mentions “I’ll just wait until the prices drop further, the owner will be forced to drop their price”.  It’s a tough call. Will they drop further? They could. What effect will the National and International economy have on our market?

Reports from America are clearly showing a marked improvement in their residential markets…you would imagine that would be impossible! Unbelievably, prices are actually rising in parts of America, sales are increasing.

Let’s not get too excited. The pace of recovery will be slow, the prices of many homes will continue to decline. Hundreds of people in Cairns remain underwater, owing more on their homes than the homes are worth, and unable to sell. A setback in a fragile economic recovery could easily reverse the situation.

Compared to other investments, real estate is still the safest bet of all. There are not a whole lot of places to put your money. The marked increase in Self Funded Superannuation Trusts purchasing properties in the past few months tells us the story.

It feels very much like we have hit the bottom in Cairns and we are starting to come off that bottom but,  we are all a little nervous about that word “recovery”.   

Have a great week!

Is this the "sign of the times"

Interest in Cairns Real Estate Continues To Build

Interest in the Cairns residential housing market continues to build as we head towards the final countdown. It is just two weeks from the reintroduction of the Home Occupiers Stamp Duty Concessions in Queensland, on July 1st. Great to see crowds beginning to build at our advertised Open Homes and Auctions! I have just come from a Receivership Auction at Trinity Beach with a crowd in attendance of some 80+ people with several strong bidders, crowds not seen for some 4 years in Cairns. While there is plenty of interest, we are still dealing with the most educated buyers we have ever experienced. There are so many internet sites for buyers to learn and understand the market and property values. One to watch out for is www.onthehouse.com.au.

We are well and truly entrenched in a Buyers Market whereby, they call the shots and Sellers remain either wedded to prices that, in many instances, are simply unachievable in the present Cairns market. Or banks retain a strangle hold on Property owners who simply cannot sell for the prices that buyers want to pay due to negative equity.

There is no doubt that sales volumes are increasing and prices stabilising in a trend, that many say, could last for several years. The good news is that there is plenty of action going on in what is possibly the new “normal market” for our region.

Regards,

Debbie Aldred

Cairns Property Pulse

<><>

Huge interest at todays Trinity Beach Auction 16-6-2012

Welcome!

Homes of the beautiful Cairns Esplanade - 12/6/12

Welcome!

Welcome to Cairns Property Pulse by Debbie Aldred. My goal is to provide you with a quick, easy read update on the Cairns Property Market. Many of you have known me for several years now and are well aware that "I tell it how it is".

My updates will be based on my observations while out and about doing what I do best.....selling real estate. Speaking with real people, real sellers, real buyers, ...real landlords and real tenants. I will also attach local news articles, market reviews from the likes of Herron Todd White, and newsy local articles that you will genuinely find interesting. I am always conscious of the fact that some 75% of our clients are from other parts of Australia (and from the world), often in completely different property cycles.

I am one of the top Cairns residential sales specialists and am proud to be part of the World's #1 real estate agency group, RE/MAX Real Estate Services.

I am passionate about real estate and I trust that I can keep you in tune with what is happening in this beautiful, tropical paradise we all know as Cairns.

I would also like to invite you to check out my Facebook page Facebook.com/CairnsPropertyPulse for further updates on the local real estate scene......and if you like it, please click on the little hand!

Kind regards, Debbie