Cairns Property Market Month in Review - HTW

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The latest figures on Cairns give the population growth rate at about the 1% mark, which implies that for the first time in many years population growth is coming solely from natural increase (excess of births over deaths) rather than migration. Or in other words, migration has slowed right down, and right now there are just as many people moving out of Cairns as there are moving in. Moreover from a property market perspective the people moving in are likely to be demographically different to the ones moving out – the people moving in are more typically older/empty nester lifestyle migrants with completely different housing needs to the ones moving out, who are more likely to be younger singles/couples/families in search of better employment and income opportunities.

As population growth and the economy have flattened so too have property and development. Apartment construction in particular is at a complete standstill with no new Council building approvals issued for units in the past 12 months. Land development is similarly in the doldrums due to severely depleted residential land demand.

However it is not all doom and gloom - there is light at the end of the tunnel. Even though we’ve been saying for some time that the Cairns market is at the bottom of the cycle and is about to turn, this time we REALLY BELIEVE that the Cairns market has bottomed. Our evidence is that:

• Cairns has been experiencing a good tourist season this year which, together with the start-up of direct air services to China next month, will be game-changers in terms of future economic and market confidence;
• Property is moving again with sales volumes increasing in recent months;
• There is limited new construction meaning that supply will shorten as sales volumes increase;
• The rental market remains tight (current trend vacancy rate around 2.5%) and rents are increasing;
• Prices after inflation are down about 25% on the peak of the market, and interest rates are low and heading lower meaning improved affordability.

Source: Herron Todd White Cairns, The Month in Review - Sept 2012

Peter Musso licensed real estate agent at Ray White Smithfield selling property in Cairns' beautiful northern beach suburbs including Trinity Beach, Kewarra Beach, Clifton Beach, Palm Cove, Trinity Park, Smithfield, Yorkeys Knob, Holloways Beach, Machans Beach, Caravonica, Kamerunga and surrounds.