The Best Performing Suburbs in Cairns

Article printed in The Cairns Weekend Post Saturday 15th October 2011

The data's in on our best performing areas: Cairns real estate agents see a glimmer of hope that the property market slump could be turning a corner. 

Latest RP Data figures offer pockets of optimism among the backdrop of doom and gloom. The numbers don’t lie.

Sales of houses in Mooroobool have seen a 21 per cent increase in median price for the quarter to July 2011. Another standout suburb, Trinity Beach, has seen the median price for a house settle at $375,000 for the same time period. And fashionable Edge Hill continues to perform well with a positive 3.6 per cent quarterly change, taking its median price to $445,000.

Ray White Cairns Beaches principal Paul Stirling, who like many Cairns agents, supplies his sales figures to RP Data – the real estate industry watermark – said an increase in strong sale figures, compared with this time last year, provided a confident platform for the industry.

"Our volume of sales per month has increased compared to the first six months of the year," Mr Stirling told The Weekend Post.

"We were averaging 13 sales a month and now we’re averaging 16 sales a month and 50 per cent of our sales market has been shared at Trinity Beach. Our core suburbs at the moment are, obviously Trinity Beach, Kewarra and Clifton beaches, Palm Cove, Trinity Park and Smithfield.

"Rents are rising. Just this week we had a five-bedroom house at Kewarra Beach, which vacated and was renting for $440 a week, and we’ve since got new tenants in and they’re paying $460 a week. So we’re seeing a $20 rise in some rental properties.

"With rents rising, this is stabilising the market and it’s having a positive effect on house values.

"We’re getting a large number of inquiries from the medical profession coming through as the Cairns Base Hospital starts to fill more and more positions in line with the expansion. We’re also getting a lot of inquiries from the LNG project in PNG and a lot of these people are purchasing.

"I strongly believe we’ll definitely be over the worst, if we haven’t already passed it now, by this time next year. I can see a strong future ahead of us in the next 12 months, it’s certainly going to be a lot better."

Mr Stirling said he wasn’t surprised to discover the "much sought after" Trinity Beach was one of the top performing suburbs with 89 houses sold in 12 months to July 2011.

"Trinity Beach also includes the Bluewater precinct, which is offering great house and land packages, but the general Trinity Beach area is a popular well-serviced area, which makes it extremely appealing to the family market," he said.

Cairns Property Office principal Greg Moule said "attractive prices" were drawing buyers to city fringe suburbs such as Mooroobool and Brinsmead.

"There is no doubt that there’s attractive buying out there and we’ve seen houses in the Mooroobool and Manunda areas selling in the high 200s," he said.

"They may be old but because it’s so close to the city, and a lot of families are now down to one car and they want to save on as much as they can in tough times, these areas make very attractive buying."

RP Data is the No. 1 provider of property information and analytics in Australia. Cairns real estate agents are not obligated to contribute their sales figures to RP Data.

View article source here

Peter Musso - Ray White Cairns Beaches - Property agent selling real estate in Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach

Cairns Real Estate Market Month in Review

Summary by Herron Todd White valuers in Cairns - September 2011.

The Cairns residential property market is still at the bottom of the property cycle and it is still very much a buyer’s market. Property demand from investors and first home buyers remains at a low level and the market for low-end housing is slow. Demand for better quality houses and units in good locations remains solid, largely sustained on the basis of the trade up buyer segment.

There are two types of trade up buyer - existing locals trading up (or down or sideways) in response to changing circumstances and/or preferences, and people relocating to Cairns.

People relocating to Cairns tend to fall into two classes - the lifestyle and the economic migrants. With the slowdown in the Cairns economy, the economic migration component, consisting largely of young singles or young couples or young families moving to Cairns for employment reasons, has diminished. However Cairns still appears to be attracting its fair share of lifestyle migrants, albeit at a slower rate than before. This segment consists typically of the pre-retirement empty nester demographic, looking for a nice place to live but with opportunities for full or part time work if required. Indeed, cashed up lifestyle migrants who have sold up in Sydney or Melbourne to move to Cairns are like gold in the current market environment.

Lifestyle migrants are demanding a variety of accommodation styles, some buying up big as if expecting to be constantly descended upon by the friends and relatives they have left behind, while others are seeking well located unit accommodation with good amenities. The northern beaches are often a preferred destination.

Locals are also active in the trade up market, but the catch with this segment is selling their existing home. We often hear of sales that fall through because buyers are unable to sell their existing house in the presently slow market environment.

Peter Musso - Ray White Cairns Beaches -Real estate agent selling in Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach

Cairns Post: Tourism Industry Looks on Bright Side as Aus Dollar Falls Against Major Currencies

Article written in The Cairns Post - Wednesday 5th October 2011

The Far North's $2.2 billion a year tourism industry is buoyed by predictions the Australian dollar could fall to as low as US80c in coming weeks.

Industry leaders said it would take time for the benefits of a lower Aussie dollar to flow through but it would make the Far North more competitive and attractive to international tourists and stop the flow of Australians holidaying overseas.

Yesterday, the Aussie dollar hit a low of US94.58c before closing at US95.22c on growing fears of a global economic crisis.

It comes after the tourism industry had struggled for the past year as the Australian dollar hit highs of US110c.

The high Australian dollar made rival destinations such as Bali, Thailand and the Pacific islands more economically appealing to both overseas travellers and Australian holidaymakers.

Tourism Tropical North Queensland chief executive Rob Giason said it would make agricultural exports and tourism better value.

"It will be good for the Christmas holidays and many Australians will take time to holiday at home instead of heading overseas," he said.

Herron Todd White Cairns research director Rick Carr said in his CairnsWatch report the falling dollar would make the region more affordable.

"Cairns’s economic recovery lost some momentum over the past month and looks even shakier against a backdrop of increased global economic and share market turmoil," he said.

"However, the fall in the Australian dollar will be welcomed by local businesses, as will recent rises in passengers through the international airport and a fall in local unemployment."

The report said passenger numbers at the international terminal had increased by 5.9 per cent since December, 2010.

Economist Bill Cummings said the falling Australian dollar would be good news for the regional economy.

"It will be especially good news for an embattled tourist industry," he said.

"The fall is pretty much across all currencies, although the fall is less against the Euro."

Cairns Airport acting chief executive officer Greg Eisenmenger said the first two months of the financial year showed international passenger numbers "remain strong".

On the Cairns Esplanade yesterday travellers welcomed news they could soon be getting a better return on their homeland currency.

"A year ago, this holiday would have cost me about 25 per cent less," Swedish tourist Mika Andersson said.

View Cairns Post article here

Peter Musso - Ray White Cairns Beaches - Property agent selling real estate in Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach

Cairns Rental Market Month in Review

Prevailing rental yields in Cairns are typified by the following examples of (hypothetical) investor purchases:

• New suburban house at White Rock, 10 km from city centre, four bedrooms, two bathrooms – purchase price $340,000 – likely rent $330 to $340 per week.
  
• Established house at Trinity Beach, 20 km from city centre, three bedrooms, two bathrooms – purchase price $380,000 – likely rent $370 to $380 per week.
• Older unit (20 to 25 years old) at Manoora, 5 km from city centre, two bedrooms, one bathroom – purchase price $165,000 – likely rent $180 to $200 per week.
• New CBD fringe high rise unit, two bedrooms, two bathrooms – purchase price $400,000 – likely rent $350 to $375 per week.

Most residential properties are achieving gross rental returns in the range of 4.5% to 5.5%. Across the entire rental market the median rent in Cairns is now sitting at $330 per week for houses and $245 per week for units.

There has been minimal change in rent levels over the past twelve months. However a major issue affecting rental yields in Cairns, particularly for units, is burgeoning body corporate fees and sky-rocketing strata building insurance costs.

As a typical example, we are aware of an 18-unit complex in Cairns North where the strata building insurance premium was $8,900 two years ago, rising to $14,900 last year and quoted at $52,000 for this year. With insurance costs alone in this complex growing to an average of $55 per unit per week, or nearly 20% of their typical rental amount of $280/week, something will have to give to preserve a decent net rental yield to investors.

Another factor affecting the rental market outlook in Cairns is a progressively tightening vacancy rate for rental property combined with the almost complete absence of new rental property construction. According to our latest Rent Roll Survey, vacancy rates in July 2011 stand (in year round average trend terms) at 2.9% for houses, 3.4% for units and 3.2% overall. As vacancy rates tighten further, we expect upwards pressure on rents as a result of demand factors as well as the rapidly increasing cost base of rental property ownership.

Information sourced from Herron Todd White's 'The Month In Review' report, September 2011 - Download full report

Peter Musso - Ray White Cairns Beaches - Property agent selling real estate in Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach

REIQ Cairns Quarterly Real Estate Market Review

House & Unit Markets

The median house price in Cairns dropped 5.6 per cent to $346,000 over the June quarter however over the year ending June the median house price recorded a 0 per cent change.

According to local agents, the June quarter continued to be impacted by low consumer confidence which was compounded by the poor tourism sector and the high Australian dollar.

The announcement that the principal place of residence concession on stamp duty would be removed from 1 August had also not stimulated the market in any meaningful way before that date.

Agents say the majority of people are just not in a position to buy because either they can’t secure finance; they aren’t confident about their jobs or the economy; or they would have to take too much of a financial hit if they sold their existing property now to buy something else.

They say confidence levels need to drastically improve and the Aussie dollar needs to stabilise before the market picks up in any meaningful way in Cairns.

Over the year ending June, Freshwater recorded median house price growth of 13.5 per cent to $499,500, but this was partly due to the varying quality of stock sold over the period.

Nestled between rolling hills, a national park and a conservation park, Freshwater is a quiet, leafy suburb, which is popular with families.

The area is well serviced by transport infrastructure – Cairns Airport is only 5km away and Freshwater Connection train station, which ferries tourists along the Kuranda Scenic Railway, is centrally located.

The median unit and townhouse price in Cairns decreased 2.4 per cent to $225,000 over the June quarter. There has been significant softening in prices of units and townhouses in Cairns with reports of units selling for close to their purchase price off-the-plan from the 1990s.

This coupled with a shift towards more affordably priced units has contributed to the reduction in median sale price over the quarter and the last financial year.

The new Majestic Palms complex at Yorkeys Knob however continued to tick over more sales. Popular with interstate investors, the complex adjoins the Half Moon Bay Golf Course and is close proximity to all amenities.

Vacant Land Market

The median price of land decreased 5.9 per cent to $168,500 over the June quarter. Local agents don’t anticipate that the Queensland Building Boost will gain much traction in the region given the general softness of the sales market would make it difficult for second and third home owners to sell their existing property to upgrade to a new home.

New house and land packages also generally remain out of the financial reach of first home buyers.

Rental Market

The median rent in Cairns for a two-bedroom unit remained steady at $250 per week between June 2011 and June 2010. The median rent for a three-bedroom house increased $10 to $310 per week over the same period.

The residential rental vacancy rate in Cairns remained steady in June, decreasing to 3.7 per cent from 3.8 per cent in March.

Local property managers say vacancies are taking about two to four weeks to relet with about two to five applications per vacancy.

Information sourced from the Real Estate Institute of Queensland Market Monitor report for the June Quarter 2011 (Issue 11).

Peter Musso - Ray White Cairns Beaches - Property agent selling real estate in Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach

Cairns Property Market Overview Presentation

Cairns property market overview recently presented by Rick Carr from Herron Todd White at to the Cairns Chamber of Commerce. Click video image above or here.

Peter Musso - Ray White Cairns Beaches - Property agent selling real estate in Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach