$178 Million Cairns CBD & Waterfront Developments

Within the past 7 days there have been two progressions in major development projects which have been very well received by the local tourism and construction industries.

The Cairns Regional Council has now officially approved the $155 million Entertainment Precinct development allowing for the progress of the design, lodgement of development applications and calls for expressions of interest from contractors.

Cairns Entertainment Precinct - Artist Impression

The development approval came down to the line last Wednesday at the Council’s meeting with six councillors voting for the proposal and five against, however after months of deliberations and scrutiny the development will now progress.

See Cairns Post article HERE

Another “Shot in the Arm” for the local construction industry came early this week when the contract for the $23 million Cairns foreshore redevelopment was awarded.

Artist Impression of Refurbished Wharf Shed No.2

Up to 120 workers will be employed by Hutchinson Builders to transform the heritage-listed Wharf Shed No.2 into commercial premises.

See Cairns Post article HERE

These projects will serve as a much needed double boost for Cairns and the North Queensland region, bringing major new entertainment, leisure and tourism facilities to the city and generating new employment not only throughout the construction phases yet also well into the future via ongoing hospitality and tourism service operations.

Click to enlarge

Click to enlarge

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

Herron Todd White Cairns Month in Review - Retail

In their monthly review Herron Todd White has decided to close the year with an analysis of the retail sector. Like the property market, shop owners in Cairns have experienced very difficult trading conditions for almost 3 years now with sporadic international tourism arrival numbers and low levels of expenditure throughout the region.

With the development of new international markets and a trend increase in tourists gracing our shores, we can expect 2012 to be a year of recovery for the retail sector however there still remains a good deal of ground to recover from the level of arrivals and subsequent expenditure seen in the most recent glory days for Cairns pre-GFC.

HTW Review Text:
The Cairns retail market has progressively faded since the start of 2008 as a result of the local economic downturn leading to reductions in consumer and tourism spending. Though we now perceive the Cairns retail market to be at or near the bottom of the cycle, the slow state of the economic recovery in Cairns means that the retail property market has remained flat during 2011. It must be also said that retail property sales in Cairns are extremely sporadic, with most sales involving retail property being of mixed use retail / office buildings or tenant buyouts of single premises.

Cairns Central Shopping Centre

This year saw Lend Lease become the sole owner of the Cairns Central shopping centre after paying $261 million to buy the 50% stake held by former joint owner Westfield. This sale, which took place in October, represents the first major retail property transaction of any significance in Cairns since the $29 million sale of the Raintrees shopping centre in October 2008. Two retail developments also commenced construction during the year, these being a $50 million extension to the Mt Sheridan Plaza shopping centre, and a $20 million Woolworths Masters Hardware centre in Portsmith.

We have seen an increase in vacancy levels in the retail sector resulting from a number of business closures attributed to the tough economic environment. However the increase has only been a relatively mild increment to the high levels of long term vacancies in some areas that pre-dated the downturn. High exposure CBD space remains well occupied, with vacancies most noticeable in the lesser exposure locations and/or on the CBD fringe. Rents have generally been static, showing ranges of $600 to $1,000 per sqm per annum for prime CBD space, and $1,000 to $2,500 per sqm per annum in key tourist precincts such as the Cairns Esplanade.

Read Herron Todd White's national Month In Review HERE

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

Higher Rents Loom as Construction Remains Slow

The Cairns Post reported today that rental yields could begin substantially increasing as early as January 2012 with the region facing a severe housing shortage.

As illustrated in the graphs below, new building approvals within the region have been at a virtual standstill throughout the past 12-18 months. Only approximately 35 new houses have been approved each month; well below the minimum of 50 required in order to keep up with local population growth.

As a result, the rental vacancy rate for houses has seen a sharp downward trend throughout the same period and is expected to continue doing so with no real improvement in building approvals to be seen. Watch this space!

Article text: CAIRNS landlords could reap the benefits of increased rental returns as early as January with the city facing a housing shortage. Are you looking for a rental property?

Tightening rental vacancies, a slump in building approvals and wary investors has left Cairns agents searching for rental properties, particularly houses.

While rental prices continue to stay steady, with the average three bedroom house renting from $350 a week and a two bedroom unfurnished unit starting at $180 a week, agents say the demand for houses will force rental prices up.

A recent Herron Todd White CairnsWatch report indicated vacancy rates for houses was sitting at 2 per cent, with the rate at 3.1 per cent for the same period last year.

"The housing side of things is very tight, especially for this time of year,’’ LJ Hooker Edge Hill director Ross Moller said.

"There are plenty of units but vacant houses are far and few between. We’ve got eight vacant houses and we could put someone into those houses today, but that’s all we’ve got.

"If there isn’t an increase of houses available on the market in coming weeks, especially coming into January, then the demand for houses could see rental prices for houses start to go up.

"On the other hand units might come down to encourage people to rent units.

"There’s plenty of units and there’s no shortage that’s for sure."


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

Body Corporate Insurance Makes Local Headlines

 

The following article concerning the ongoing body corporate insurance issue in the Far North appeared on the front page of the Cairns Post yesterday. As discussion around this issue grows local leaders are understandably not finding it hard to gain the support of the local community. Almost 20% of the total dwellings in the Cairns greater region alone consist of units within body corporate and strata-title arrangements and all owners of these properties will be effected by the recent insurance premium increases.

Article Text: BODY corporate and strata title owners are demanding a Federal Government-backed reinsurance scheme if an inquiry into the insurance industry does not result in a significant fall in premiums.

The call comes as the House of Representatives Standing Committee on Social Policy and Legal Affairs agreed to consider residential strata insurance as part of its inquiry into the insurance industry.

The agreement was reached after meetings involving property owners in Cairns, Townsville and Airlie Beach were told premiums had soared by up to 400 per cent.

Cairns-based Senator Jan McLucas and the Opposition’s federal member for Leichhardt Warren Entsch joined forces and lobbied in Canberra for the issue to be included in the inquiry.

Strata Community Australia CEO Mark Lever said the reinsurance proposal was quickly gathering momentum.

"The report of the Natural Disaster Insurance Review released last week pointed to a solution in the form of a specialised government-backed reinsurance facility for high risk properties in both flood and cyclone zones and the Government has already indicated it will consult further on this,’’ he said.

"This inquiry is an opportunity to fast-track that consultation and put a solution in place as quickly as possible."

Mr Lever said the community forums last week attracted 400 "angry, frustrated, confused and, in many cases, desperate apartment and townhouse owners and investors" who spoke of premiums rising from 200 to 400 per cent.

The issue affects about 70,000 body corporate property owners north of Rockhampton.

"The meetings heard from pensioners worried they might be forced from their homes, other retirees who could not sell up because of a collapse in the apartment market and investors facing negative returns before interest," Mr Lever said.

"Real estate agents said they could no longer recommend apartments and townhouses as investments and insurers could offer no sign of relief on the horizon.

"With development at a standstill and body corporates slashing maintenance and other spending to cushion the increases, the knock-on effects to the north Queensland economy are continuing to spread."

Swangem on McLeod body corporate chairman Ian Jamieson said he was hoping government pressure and/or intervention would reduce premiums.

"It’s becoming unsustainable. Our insurance has gone from $4000 to $19,000," he said.

Mr Jamieson said they were being discriminated against because of where they lived.

"The insurance companies don’t even come out and inspect the properties to see that ours, which is less than 10 years old, has been built to cyclone standards and even has cyclone shutters," he said.

Mr Jamieson said in Darwin there was a government-owned insurance office and there should be one in Queensland.

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

Analysis of the Top End in the Cairns Marketplace

In their national monthly review Herron Todd White have analysed the premium end of the market in all metropolitan and regional areas. Their Cairns branch have offered the following summary of just how this sector appears to be operating in the current real estate climate:-

The Cairns upper property market is thinly traded but we would define it as anything above $1 million. This sector would contain:

• Houses with beach or marina frontage on the Northern Beaches;
• some high quality acreage properties on the Northern Beaches;
• elevated houses with panoramic views in suburbs such as Edge Hill, Whitfield, Brinsmead or upper Mooroobool;
• penthouse apartments in the CBD, beachfront and/or waterfront unit developments.

The Cairns upper property market, like the market in general, remains slow. So far this year, there have been 11 property sales at $1 million or more, compared with 30 such sales in 2010 and 54 in the 2007 heyday in the market. The 11 properties sold so far this year have been a variety: one was on the beachfront, three were panoramic, two were on acreage, three had marina frontage, and two were CBD apartments. Most have sold at hefty discounts on their asking prices, and often after extended selling periods. Sample sales from 2011 include:

• A CBD penthouse apartment, originally listed at $1.3 million in November 2010, sold for $1.075 million in April 2011;
• an acreage property at Kewarra Beach, originally listed at $1.395 million in May 2011, sold for $1.05 million in July 2011;
• a panoramic property at Brinsmead, originally listed at $1.45 million in April 2010, sold for $1.018 million in April 2011.

Two of the most highly prized properties in Cairns are also currently on the market. One is a beachfront property at Kewarra Beach, purchased for $5.5 million in 2006 and being sold in receivership, and the other a trophy property owned by a local entrepreneur in financial difficulty high above Earlville. Both these properties are seriously on the market after failing to sell at recent auction.

Iconic Kewarra Street beachfront mansion currently for sale

So how do you sell a million dollar plus property right now in Cairns? Easily, if you want to sell it for $700,000! Otherwise to sell a $1 million plus property in the current Cairns market environment it needs to be PERFECT in every way. It needs to be perfect in terms of attributes and location and absolutely immaculate in presentation.

Herron Todd White is Australia's largest Independent Property Advisory group with 58 offices throughout Australia. Their Cairns branch has a wealth of experience in providing valuation services across the commercial, industrial, rural and residential property sectors.

View Herron Todd White's national monthly market review HERE

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

Far North Insurance Concerns

A hot topic in the north at the moment; body corporate and strata title insurance premiums increasing as a number of insurance providers pull out of the market all together. A supposed rise in the number of natural disasters throughout the region is cited as the reason why compulsory insurance cover for complexes has risen on average by around 400 percent.

The following two articles concerning this topic have recently appeared in the Cairns Post and highlight a real local community concern and call to action by local MP’s.

Insurance Sting Takes Toll - 31st October 2011

THE insurance problems facing the Far North’s body corporate and strata title sector were a bigger crisis than that of southeast Queensland flood victims, an industry leader warns.

Cairns Central Plaza Apartment Hotel

Strata Community Australia chief executive officer Mark Lever said the soaring insurance premiums that body corporates and strata titles were being charged now required government intervention.

He is calling on the Federal Government to provide reinsurance guarantees for the segment in specific areas, including those in cyclone category 3 and higher areas and flood zones.

Mr Lever said he hoped to have some answers from the National Disaster Insurance Review to give to a forum in Cairns in two weeks.

“It’s a massive issue from our members’ point of view. It is causing a dramatic impact on the investment and lifestyle up there (in Far North Queensland),” he said.

Mr Lever said typically there had been 400 per cent increases as well as 200 to 300 per cent on the compulsory insurance cover.

Insurance companies were struggling to obtain reinsurance coverage as no one was prepared to take the risk, he said.

Mr Lever said it was having an impact on the property and development sectors with people reluctant to buy or construct units and apartments in the region.

Federal member for Leichhardt Warren Entsch said his office had been swamped with phone calls from concerned body corporates and property owners.

“It’s quite profound. It’s only going to get worse next year when it comes around again,” he said.

“I have examples over the past four years of insurances increasing from $11,000 to $12,000 to $23,000 and the most recent quote of $ 92,500.”

Mr Entsch said he knew of retirees who could not afford to pay their body corporate fees because of the increase in insurance premiums.

“Many owners are now being forced to borrow money to pay for this year’s body corporate fees,” he said.

Springfield body corporate chairman Don Cunningham said the insurance on their 12 units at Manoora, went from $2350 to $ 3532 last year to $15,500 this year.

View article here

Ease our insurance pain: plea from Far Northern apartment owners and investors - 9th November 2011



Leichhardt MP Warren Entsch

THOUSANDS of Far Northern apartment owners and investors hit by massive hikes in body corporate insurance will have their concerns heard by the consumer rights umpire.

Leichhardt MP Warren Entsch’s push for an inquiry into body corporate insurance has gathered momentum, with the matter now in the hands of the Australian Competition and Consumer Commission.

"Many people are absolutely distraught at the massive hikes in their body corporate insurance premiums and some of them will be out on the street if we don’t get this mess sorted out," Mr Entsch said.

In one example, a customer’s insurance premium rose from $11,000 in 2008 to $92,500 this year.

"This is having a profound impact on strata title owners in the Far North, but I’m also hearing horror stories as far south as Mackay," he said.

Mr Entsch wants strata property owners in the Far North to keep putting pressure on body corporate insurers before the next round of premiums is issued next year.

His campaign has been backed by the local body corporate and strata title sectors, which say price gouging is impacting investment and lifestyles in the region.

Strata Community Australia chief Mark Lever said there were 70,000 units between Mackay and Port Douglas, and body corporate insurance affected a cross-section of the community.

"This is owners, investors, retirees, holiday homes – a lot of people are impacted by these rises," Mr Lever said. He will host a forum for strata property owners in Cairns on Monday.

Mr Entsch blamed the huge price hikes on the insurance giant Zurich forcing other companies out of the market by undercutting costs and then raising premiums by as much as 800 per cent.

But Zurich insists its premiums reflect the growing cost of doing business in the Far North after natural disasters such as cyclones Larry and Yasi in recent years.

Mr Entsch has urged affected property owners to attend the Natural Disaster Insurance Review at the Holiday Inn on November 14.

View article here

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