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

 

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!