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!

 

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