Cairns Continues to Soldier On

Cairns real estate continues to move from strength to strength as we gather momentum for a better than expected, galloping finish to Christmas. To many, there is a sense in the market that now is the time to sell, taking advantage of the strongest market conditions since 2007. There is clearly a wariness about the direction of the market next year but, the news for buyers is, well priced properties are still getting snapped up at a rate of knots!

The lower range properties are obviously receiving a lot of attention. One 2 bedroom unit advertised at $115,000 on the internet had 5 offers on it within  2 hours of being live! Whist buyers are more educated than ever to market prices, they are still looking at past prices quoted on sales data websites, often the information is well over 3 months old. As a consequence, in a rising market, more people than ever are complaining about “the one that got away!”…some offers are coming in too low! Look forwards, not backwards. Sellers have no problems looking forward - funny that. Buyer frustration is becoming stronger by the day with quality stock in low to mid-range price brackets becoming severely depleted. 

While there is plenty of activity about the City, locals still tread with caution as, sadly, there are still business foreclosures evident with some of our long term favourites simply running out of cash reserves to keep going. Ask any real estate agent about the prevalence of residential property owners in strife with their mortgages. There is a fair bit of that going on, sending mixed messages to the local market. All is not completely rosy in paradise, but we are certainly looking forward to a very positive 2014. For the latest on the Cairns property market movements, here is the Herron Todd White Report, CLICK HERE: 

It’s Official - Cairns Is Almost Ready for Take Off!

The good news keeps coming in for real estate punters with word / confirmation that Cairns has officially vacated her 5 year position at the bottom of the property clock and heading for better times! The latest Herron Todd White Report is out but with a bit of a mixed bag. Lot’s of positivity, with a dash of doom here and there to keep us real. Locally, another major developer has gone down, a few more of our favourite businesses have not been able to pull through to the good times. Unemployment has risen (what a nice place to be unemployed though!) On the brighter side, Mortgagee In Possession sales are beginning to fritter away. The talk continues about the AQUIS development in Yorkeys Knob becoming a reality. Airport passenger numbers continue to improve with an increase of 6.1 % in the past 12 months. Building Approvals are up a massive 51.4% for the year, a huge boost for the economy and confidence levels of the locals. There seems to be a lot of action in the streets with restaurants and hotels reporting very positive action. It is wonderful to see Cairns looking so vibrant and alive again! 

 

While there has been no movement in median prices of residential property, the number of sales between September 2011 and September 2013 have increased by an impressive 33.7%. The median house price sits at $354,400, 2.4% lower than February this year. Median unit prices sit at $185,000, a surprising 8.6% lower than February…we are not quite out of the woods! With stock being swallowed up by the increased sales volumes, listings are getting tighter by the day for agents. There are a few exceptions to the rule with stock variations very much suburb sensitive. We are still adjusting prices downwards in some areas, the most popular suburbs are definitely enjoying more demand, putting pressure on prices.

 

Herron Todd White reports that the median rent has increased by only $10 per week in the past 12 months. Houses at a median of $355-$365 per week, Units at $255 to $265 per week. The vacancy rate for houses is holding at 1.7%, Units at 2.2%. At the 2% overall vacancy rate, the rental market seems to be balancing out to an optimal level for Cairns. Click Here for the full economy report from Herron Todd White.

 

We are swiftly changing from a buyer’s market to a much more level playing field between buyers and sellers. Open home numbers are improving markedly, record numbers of auction bidders, more homes selling under the hammer. Homes selling quicker if priced right. I would suggest there is much optimism out there, though the newspapers would lead us to believe that life is a bed of roses up here. We are clearly off the bottom but it could be a hard slog to the top if sellers begin getting over excited about the market. Unless your property is priced right, presented right and marketed right, it could still sit on the market for quite some time. Don’t believe everything you read in the news, but it is still worth strapping yourself down for a fun ride of real estate action in 2014…The Cairns market is showing every sign of taking off!

 

 

The Cairns Real Estate Market – Let’s Get Excited!

It seems there are exciting times ahead for the City of Cairns with plenty of good news on the horizon including the announcement of the plans for the $4.2B AQUIS Great Barrier Reef Resort Development in Yorkeys Knob. Here is a link to the overview if you are not familiar with it: http://aquisgreatbarrierreefresort.com/wp-content/uploads/2013/08/Aquis-GBR-Resort_Project-Booklet_MedRes1.pdf. We are all hoping of course, it gets the full go ahead. Cairns has a spring in her step as the excitement begins to build; the Cairns Amateurs Cup this weekend coincides with the government elections and, as real estate sales agents, we are expecting the new surge of growth to begin to show itself as positivity and hope takes the place of 6 years of doom and gloom!

The continuous pick-up in sales volumes is just beginning to have an impact on prices. Though prices record as quite flat across town, they are balanced out by the fact that some suburbs are showing 5% rises, whilst others are still sliding. We remain at the bottom of the property clock.

Buyer demographics are almost exactly the same as 2003 whereby momentum was building as out-of-town buyer’s realised value in Cairns prices and clearly recognised a bottomed out market. Unfortunately, many locals back then sat on their hands complaining they were missing out on all the “good deals”. It is happening again now in 2013. NSW buyers are showing particularly strong interest in our real estate, not afraid to pay reasonable prices and realising that if they do not buy now, they could miss out. Locals often ask us “What is the lowest figure the Seller will take?” Out-of-towners have a different take on things. They are doing their research, often not even viewing the property and stating “…that’s a fair price – I’ll take it”

Sellers would be wise to listen to the current market without getting too excited with the prospect of rising prices however. The valuers’ are still tough, the banks do not intend on taking risks with buyers wanting to invest in what still appears to be a restless Cairns market. New build housing popping up in pockets about Cairns fiercely compete on
price with older homes. There are more and more being built slowing demand on existing housing. Building approvals have gone up by a massive 43.1% between December 12 and June 13. That’s huge! A major concern for agents is the fact that stock is so tight; in fact houses actually listed for sale have reduced by 20.6% between June 11 and June 13. Why complain?! This is one of the major stabilisers of current local prices. An increase in stock could pop this bubble we are all hoping for.

A new government in the starting blocks…what sort of measures will they have to take to get the country back in shape? We are witnessing local mining contractors losing their jobs now. Ergon Energy workers being trained to handle retrenchments, a very nervous Queensland Health sector to name but a few concerning events. On the other hand, across the nation, low interest rates, rising incomes and improved affordability, rents growing quicker than house prices… the creation of a buoyant real estate market at work. Anything could happen after next week but, rest assured, this weekend will definitely be a great excuse to celebrate what we hope will be the start of some serious action in the Cairns real estate market. The latest Cairns Watch report confirms much of our thoughts. Click here to view the August Edition for Herron Todd White: http://www.cairnswatch.com.au/uploads/uploads/201308fullreport.pdf

The Good News Keeps Coming For Cairns Real Estate

This is definitely the most exciting time in our real estate market in Cairns since 2007, with the momentum clearly showing some great improvement in sales volumes as Cairns continues to build on its economic recovery. As you know, we are heavily dependent on tourism, and having had no favours from the Aussie dollar being so high, the accommodation occupancy trend has moved up to a sound 69.8% with airport passengers up by a record 6.3% over the past 12 months as we begin heading into our peak tourist season. A combination of those Chinese flights into Cairns and targeted delegations from Cairns business leaders to form new markets and ties with, particularly the Chinese and Papua New Guinean markets, has been a real shot in the arm for business activity and the stabilisation of employment in the Far North. We are still seeing plenty of new families making their move to Cairns and flowing through Open Homes, clearly excited to be here!  

As most of you will be aware, sales volumes have been steadily increasing though prices still remain flat-lined. For example, the February 2013 median house price sat at $352,400, just 0.8% higher than February 2012. Unit sales fared no better with a median price of $190,400 in February 2013, 2.1% lower than in February 2012. The rental market remains tight with the vacancy rate for houses sitting at 2% and units at 2.8%. Many Landlords are trying to increase rents to prices never ever achieved in our market. Tenants are avoiding overpriced stock so be conscious of this when pushing the envelope with Property Managers advice. The median rent for houses have indeed increased by $20 per week in the past 12 months, up from $345 per week to $365. Units have come from $245 to $265 per week. Whilst our rents are a lot cheaper than down south of Queensland, our lower wages also need to be taken into consideration.

The great news is that Cairns is expected to finally break from the bottom of the Property Cycle in the coming months. For buyers, it is glaringly obvious that moves should be made to secure property now rather than waiting for an upward trend. Some select properties are now only on the market for a few days. If it is well positioned, well priced, and most importantly, advertised well, stock will start moving quickly. Agents are still working on past sales prices. When the market starts moving, you will most certainly see prices beginning to move up to slow this trend down. It has happened to every property cycle since the beginning of time. How many of us will reflect in the future with a sigh… “ Should have bought that property in 2013!”

For the full Herron Todd White Cairns Watch Report for April, click here:  http://www.cairnswatch.com.au/uploads/uploads/201304fullreport.pdf

  

Cairns Property Market In Recovery Mode

 

Construction on the move - Cairns Base Hospital

 

There is a new buzz about Cairns with lots of good news surfacing for the economy. Most of us are taking this news in with a cautious optimism, things are still very shaky for many businesses and families but at least there is light at the end of the tunnel. Right now, we have much to be thankful for. We have had the most glorious summer up here. Cairns is lush and green having a perfect balance of generally light rains and plenty of sunshine for the entire wet season. It came as no surprise to find that domestic passengers at the Cairns Airport are achieving record highs with a growth of 7.9% in volume in the past 12 months. Unemployment is at its lowest rate since December 2008.

Open Home numbers are really exciting…particularly for properties advertised well. I have not seen these numbers since 2006 and I tell you, as real estate agents, it is such a thrill to see the numbers back! I recorded 86 people through one Forest Gardens Open Home… People were lined up all the way out to the street. This was a house that had been on the market for 5 months. Two adverts, and bang! Five offers in one day! It was priced to meet the buyer’s market. Though the residential sales volumes are increasing, it clearly remains in favor of the buyers. Cairns is still officially languishing at the bottom of the property cycle.

 

 

We appear to be experiencing a bit of what I call, a “Change-Of- Guard” with buyer profiles. Many Cairns residents have lost their jobs recently, particularly Government workers. Many are packing up and leaving town. Speak to any removalist. Replacing them, we are finding a phenomenal number of new faces from Adelaide, Darwin and WA. Kind of exciting for the town!

Medium houses prices came in at $354,000, a rise of only 1.7% since December 2011. Medium prices for units dropped to $170,000 in December, 6.7% lower than December 2011….still in trouble. The news keeps getting better for residential investors with rentals still critically tight as the result of ongoing demand and no new supplies on line yet. The vacancy rate for houses was officially 1.5% during January, while units sat at 1.9% with an overall trend of 1.7%. Relief is on the way for tenants with building approvals for housing up an incredible 36% compared to 2011. Unit development remains pretty much non- existent with developers still trying to offload stock built before the GFC. For a full report click on the Cairns Watch Report.
 

It is still a very tough market but confidence is clearly building. Lots of bargain hunters coming forth from the south with some ridiculous low offers. Some score, many are getting frustrated. Many have left their run too late. Competition is building for well priced properties…This market is getting really exciting, but we won’t crack the champagne just yet!

Have a great week, Debbie