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"