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"