Cairns To Just Keep On Rising - Optimism Is Finally Outweighing Pessimism!

Last week I had the privilege of being invited to a presentation by Dr Andrew Wilson, the Fairfax Senior Economist, outlining the Australian Housing Markets Report with a special highlight on the Cairns Market…the main headline being, ‘Cairns To Just Keep On Rising’. Music to our ears!

Most real estate agents remain cautiously optimistic about these so called ‘rises’ that the experts are predicting for Cairns, but Dr Wilson presented a very balanced and sensible report, backed up with plenty of credible evidence, many of which was enforced by our experiences in the real estate marketplace. And to be frank, based on this guy’s previous presentations, I feel quite confident we are on the right track.

Cairns remains a ‘premium lifestyle destination’, particularly for “Fly-In-Fly-Out” residents , regional sea changers and retirees whereas  the likes of Townsville remains largely an ‘economic’ town  . Our market is still very affordable by comparison to other cities. There are still very few houses being built, but this is obviously on the increase. Hardly any units are being built. This all puts pressure on price…a typical supply and demand trend.

Optimism is finally outweighing pessimism

In summary, the Cairns property market is clearly moving from recovery to recovered. The estimate is a return to pre GFC levels by June 2013.

·         Cairns has had 2.7% growth in the 1^st quarter of 2014

·         Over a 5 year period, it has risen by 7%

·         The average house price is now $380,000

·         The average unit price is $220,000

·         Expected prices to keep rising

·         Cairns jobless numbers are falling, though employment remains flat, but stable

·         Growth in China remains strong impacting on local tourism and investment

·         Interest rates are set to remain low

·         The $4.2B AQUIS development is obviously a key driver in moving forward

·        Confidence remains a key to Cairns growth 

·        View the full AHM Report here:

The latest local Herron Todd White Report,’ Cairns Watch’, reflects much the same by comparison. They state that the official population of Cairns stood at 153,566 in June 2013. They also estimate that the local Cairns population will grow by about 2.4% in the 12 months to June 2014, followed by a 2.3% growth in 12 months to June 2015. Here is the latest ‘Cairns Watch’ Report.

Through the eyes of a Cairns real estate agent, sales remain steady though buyers are clearly still hoping to secure properties at yesteryears prices. Many sellers want to sell at next year’s prices. Our job is to negotiate to bring these two time zones together…often not an easy task. Throw the valuers into the equation and it becomes even more challenging. Cyclone Ita, Easter, Anzac, Mothers Day, school back and the big Federal Budget have all played havoc on the momentum of the market in the past month. Who said real estate was easy?

The news is more positive than ever for our beautiful town. As property owners, you should all be thrilled with these two reports!

Regards, Debbie

Residential Sales Levels up 40.9%...Cairns Powers On!!

Exciting times for the recovering real estate market in Cairns as investor demand picks up and more people take on the opportunity of some excellent buying opportunities. Prices are slowly improving with buyers now seeking to secure a bargain before the market gets out of their reach.

 

Real estate agents are enjoying good volumes of potential buyers through properties as the market claws its way back. From a selling agents view, we now have the exact problem we had when the GFC hit hard; only the problem is in reverse! Buyers are still reflecting on past sales and making assumptions on value based on this past sales evidence. Sellers are getting excited with the constant banter from the media beating the drums on the signs of the rising market. Some sellers expectations of price have moved way ahead of the market…I guess the prospect of a fantastic price would excite anyone! Our job is now to pull both the buyers from low expectations and the sellers with high expectations together; like two stubborn horses with their hoofs stuck firmly in the ground. Smart buyers are realising their predicament very quickly as offers are refused, opportunities of great buys are slipping through their fingers as multiple offers coming rolling in on well-priced properties.

 

Price will always relate to time in this game. The higher the price, the slower the sale. With the scales beginning to tip in the direction of sellers thanks to a lack of listings available to sell, the situation is beginning to even out. Auctions are becoming more popular as a means to cure the problem. This month the RE/MAX Cairns office auctioned off 6 Police houses. With 70 bidders registered, there were 64 upset buyers walking out that night with starting bids from the crowd starting well above many budgets.

 

·         Sales volumes are continuing to acelerate

·         Rent prices are continuing to climb

·         The population continues to grow

·         Pressure is increasing on prices as a lack of listings is beginning to frustrate buyers

·         Interest rates are at an all-time low

 

The AQUIS development plan appears to have been the main catalyst in much of this renewed buyer confidence. Although we received news recently that there will be a delay on this plan for at least another 18 months, it really came as no surprise to locals. It certainly shone the light on what is possible for Cairns and injected a massive wave of enthusiasm and investment interest to the region. The Christmas tourism season also produced some exceptional, record breaking numbers with reef charters booking out for days at a time, hotel/motel occupancy rates at peak levels and many happy cabbies about! We were blessed with perfect weather too!

 

The January CairnsWatch report from Herron Todd White revealed Cairns' residential property sales had increased by a staggering 40.9% between December 2011 and December 2013. The average median rent increased by $15 per week over the 12 months to December 2013, up from $355 to $370 per week for houses and $255 to $270 per week for units. Building approvals are now at a 3 year high.

You can read the last two full HTW reports here for both January

http://www.cairnswatch.com.au/uploads/uploads/201401fullreport_1.pdf

and February http://www.cairnswatch.com.au/uploads/uploads/201402fullreport.pdf

 

All in all, things are looking good for property owners and potential investors to the region as Cairns powers on.

 

Have a great month!

AQUIS MOVES FORWARD WITH REEF CASINO TRUST TAKEOVER

 

Aquis Great Barrier Reef Resort Group today announced it has taken the next step in its proposed $269 million takeover of the Reef Hotel Casino by entering into a Takeover Bid Implementation Agreement with the Reef Casino Trust (ASX: RCT).

Aquis Chief Executive Officer Justin Fung said the move showed the proposed takeover bid was on track with both parties working co-operatively to achieve a successful takeover.

“We are pleased to have reached this agreement for the Reef Casino Trust,” Mr Fung said.

Mr Fung said he welcomed the announcement today by the board of Reef Corporate Services Limited on behalf of the Reef Casino Trust that it unanimously supported the proposed takeover offer by Aquis (subject to certain matters set out in full in that announcement).

RCT’s two largest unit holders, Casinos Austria International and Accor who collectively have a relevant interest in more than 70 per cent of the units in RCT, have also confirmed that they intend to accept the Offer in respect of all of their RCT units within two weeks of the Offer opening and would not withdraw that acceptance.

Subject to the terms of the Takeover Bid Implementation Agreement, Aquis will make an off-market cash bid to acquire all of the ordinary units in RCT for $4.354 in cash per unit. This bid, in conjunction with other share purchase agreements for other entities related to the operations of Reef Casino, will deliver ownership of the Reef Hotel Casino. Aquis has also separately agreed with Casinos Austria to acquire Casino Canberra.

The proposal, if it proceeds, would provide investors in the Reef Casino Trust with a very attractive return on their investment, with the proposed price representing a 53.3% premium on the closing price ($2.84) on 12 November 2013 (the last trading day prior to this proposed bid being announced) and 69.4% premium to the six-month VWAP of $2.57.

As well as the acquisition of Reef Casino Trust, Aquis is participating in the State Government process that commenced in late 2013 for the grant of two regional integrated resort licences.

“As well as the acquisition of Reef Casino Trust, work is also continuing on the Aquis project.  If we are successful, I can see the Reef Casino offering additional synergies and benefits to staff and the Cairns community through becoming part of that exciting and much larger integrated project,” Mr Fung said

Copyright © 2014 Cairns Chamber of Commerce, All rights reserved.
You are receiving this email as you (or the company that you work for) are subscribed to our mailing list. The Cairns Chamber accepts no liability for any loss or damage arising as a result of the use of, or reliance on, the information contained in this email. Your privacy is important. To ensure your edition is received every time, add us to your safe senders list.