Cairns Post: PNG investors eye Far North Queensland

PAPUA New Guinea residents are the largest foreign investors in the Far North, according to the latest figures from the Registrar of Titles.

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They bought commercial, residential and other property worth $4.5 million out of $16 million of foreign purchases in the last financial year.

Next on the list was the UK ($3.5 million), NZ ($2 million) and Japan ($1.9 million).

Other notable buyers were from the Czech Republic ($680,000), Greece ($530,000), Hong King ($491,470), Argentina ($490,000) and Malaysia ($394,300).

Hong Kong residents own the largest amount of land (1116ha) followed by Belgium (492ha), the UK (352ha), Japan (278ha) and China (91ha) while UK investors own the largest number of land parcels (257) followed by Japan (214), NZ (212) and PNG (101).

CBRE Cairns managing director Danny Betros said there had not been many large sales to PNG investors in recent times.

He said the last large sale was the $19 million three-storey office building at 120 Bunda St to a PNG consortium in July 2010. The building was bought by Mineral Resources Lihir Capital Ltd, a company that receives royalties from the $1 billion gold project on Lihir Island, and invests in property and other concerns on behalf of the community.

In May last year, a PNG family’s first foray into the Far North’s commercial property market was expected to be the start of further investments.

The Honale family bought the home of Channel 7 local news in Mulgrave Rd, Parramatta Park, for $3.2 million.

Mr Betros said there were about 12 groups representing PNG investors active in the Far North. He said the mining boom was sparking interest by PNG investors in the Far North as well as because of its close proximity.

It is understood a PNG consortium is also eyeing off one of the Cairns CBD’s largest office blocks, the Corporate Tower.

Greg Wood of Knight Frank Cairns said interest in property in Cairns had dropped off following the political stability in PNG.

Mr Wood said he expected the number of Australians and others working in the PNG resources sector to start buying mainly residential properties in Cairns for their families.

The Far North’s lifestyle, attractive property prices and the resource boom is drawing investors from PNG as well as Western Australia and Darwin who are snapping up prestige waterfront homes and land in the elite Bluewater estate.

The Cairns Post - Wednesday, April 11, 2012
Writer: Nick Dalton
Peter Musso licensed real estate agent at Ray White Cairns Beaches 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 and surrounds.

The Future for FNQ Holiday Accommodation

Holiday style properties have historically been most attractive to lifestyle investors in search of their own property which they can use themselves and lease out in the meantime in order to cover costs, with the added benefit of long-term capital growth.

Unfortunately, a deflated international tourism market in the far north experienced throughout the past 3 years has diminished the ability of these holiday properties to cover those ongoing costs. Many holiday properties only barely manage to return enough each year to cover body corporate levies, council rates and other ongoing costs leaving owners with very little by way of net investment return.

The majority of investors who are purchasing holiday styles properties within the region are now purchasing with a long-term strategy in place. They focus on the high level of affordability of such properties relative to the overall market cycle and project for future earnings to be achieved when the tourism industry eventually returns to strength.

Without a long-term perspective it can be very difficult for purchasers to see value in these properties within current local tourism conditions. However, the latest Deloitte Access Economics’ Tourism and Hotel Market Outlook has brought some welcomed news stating that the accommodation industry in Cairns should start seeing gradual improvements throughout 2012 and projecting sustained growth up to 2014.

“The Tropical North Queensland (TNQ) region has faced challenging conditions in recent times, losing market share, particularly as the Japanese source market has declined. Occupancy rates and RevPAR (average yield per room) have fallen sharply since the onset of the GFC.

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However, our forecasts suggest a turnaround in performance for the TNQ hotel market, with occupancy rates to be flat in the first half of 2012, before increasing six percentage points – from 57% to 63% – by end-2014.

RevPAR is forecast to increase by 27% over the period 2011 – 14, however, again, this is off a relatively low base. Indeed, by the end of 2014 RevPAR for TNQ region is forecast at just $86, which is the lowest yield among the regions reported here.”

Download the full report here

It is expected that tourism industry growth will be fuelled by the emerging Asian economies of China and India. These markets also often prefer nature-based tourism whereby Far North Queensland is positioned to take advantage.

Peter Musso licensed real estate agent at Ray White Cairns Beaches 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 and surrounds.

New Flights Bring "Quiet Confidence" Back to Local Tourism

Experts estimate that the new international flights coming to Cairns from next week have the potential to generate approximately $100 million per year in visitor expenditure.

Cairns Airport chief executive officer Stephen Gregg said "The reinstatement of services between Cairns and Osaka means our region once again has access to the important western Japan tourism market."

Tourism Tropical North Queensland chief executive office Rob Gaison said there was quiet confidence within the industry the flights would allow operators to claw back the 106,000 overseas visitors lost in 2009 and the $194 million they would have spent.

Full article: www.smartlinecairns.com/newsletterupload/100313flights.pdf