Herron Todd White Cairns - The Year Ahead

As one of the many avid readers of the CairnsWatch report released by Herron Todd White I have followed the data presented with keen interest each month in and out for over the past 5 years. In the December 2010 edition of the CairnsWatch report it was officially stated that the Cairns property market was at the bottom of its overall cycle. Two years on and the CairnsWatch report still confirms that Cairns remains placed in the same position within its cycle although a general decline in median values throughout the region has been seen within that time. 

Herron Todd White can be forgiven for perhaps being a little too optimistic in their assessment of the future for the local economy at the time - whilst many areas within Australia have seen great recovery following the Global Financial Crisis, Far North Queensland has not been so lucky and to say that local business conditions throughout the past 4 years “have been tough” is a severe understatement.

We can only remain positive, and due to several important local economic developments (discussed below) we are currently experiencing our highest levels of local business and market confidence since the GFC first affected the region in early 2008. Herron Todd White’s assessment for the year ahead follows…

The Cairns residential property market remains at the bottom of the property market cycle, but there is light at the end of the tunnel with some tentative signs of consolidation that will continue during 2013.

The local economy is progressively improving, aided by a much stronger tourism season during 2012 and the recent start-up of direct air flights to China delivering greater numbers of Chinese tourists to Cairns. 

However it is taking a long time for these developments to filter through to the improvements in the consumer confidence that is needed to resurrect the local property market.

The building industry also appears to be making a comeback, with the latest statistics showing a 39% year-on-year increase in the number of building approvals issued for new house construction. Even so, conditions in the industry are still tough and unit construction remains dead-in-the-water.

"....the Cairns residential property market remains at the bottom of the property market cycle, but there is light at the end of the tunnel...."

One push factor for the market is that vacancy rates for rental property have lowered considerably over the past 12 months and are now extremely tight. According to our Cairns Rent Roll Survey, vacancy rates for houses have come down from a trend level of 4% in December 2010 to 2.2% in December 2011 and 1.3% in December 2012, while those for units have come down from 4.8% to 1.9% over the same period. In addition rents are climbing, rising by about $30 per week for houses and $15 per week for units over the past two years. Tight rental market conditions, rising rents and affordable property prices are providing the right pre-conditions for the market to gradually regain some momentum during the next 12 months.

Click here to download Herron Todd White's national report for January 2013

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.

The Cairns Post - "North a National Hotspot"

The Far North has become one of Australia's buyers' market hotspots, with potential home-owners having the upper hand when buying property.

According to the latest Commonwealth Bank/RP Data Home Buyers Index (click here to view RP Data's latest press release), the region has been listed in the top five buyers' markets in Australia.

The report revealed that regions where sellers held the least leverage and buyers were empowered tended to be primarily coastal or lifestyle markets, where housing conditions have been relatively weak.

Herron Todd White Cairns director Rick Carr said buyer activity in the region had fallen away since the onset of the global financial crisis.

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"We still maintain Cairns is a buyers' market," he said.

"There are more properties on the market than there is demand. The market power is with the buyer."

The economic researcher said prices had declined over the past couple of years, but the cost of finance and affordability were finally lining up.

"The market is at or close to the bottom of the price cycle but that's a forecast, not a guarantee.

"The cost of finance is much better and there is better affordability, the economy is starting to pick up."

Ray White Cairns Central sales agent Therese Plath believes buyers are aware they have the advantage.

"I do believe the buyers are active out there, and certainly in the valid price range.

"We did a contract (on Wednesday) for a couple (buying) in the lower $300,000s range. Because the interest rates are attractive at the moment and the prices are attractive - it's never been a better time for them."

RP Data's senior research analyst Cameron Kusher said plenty of stock and a low number of buyers mean it is an ideal time for property hunters to hone their negotiation skills.

"In recent months there's been a bit of an uptick in people actively looking, but on a historical basis the amount of stock for sale is quite high," he said.

“While those conditions persist, you're typically going to have a market where buyers are better positioned to negotiate than sellers.”

Conditions are currently tipped in favour of buyers in all states and territories except the ACT, although there are still significant differences between states and cities.

Queensland and Tasmania show extreme buyers' market conditions, while parts of southwestern and inner Sydney are more evenly balanced.

Mr Kusher said low growth in house prices over the last decade meant many potential buyers had opted to boost their savings or pay down debt rather than upsize their homes.

“Any little growth (in house prices) is not going to bother people, because they're just saving for a bigger deposit.

“People are realising they have probably leveraged up on debt a little bit too much in the last decade, and they're now trying to get themselves into more comfortable positions.”

The top five buyers' markets are Southern (TAS), Lower great southern (WA), West Moreton (QLD), Wide Bay Burnett (QLD) and Far North (QLD).

Article printed by The Cairns Post Property Guide- 26th January 2013

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.

Cairns Post: Bungalow Tops List for Rental Returns

BUNGALOW has topped the list for the highest rental yields for units in the Far North.

According to RP Data figures, released this month, Bungalow in Cairns, recorded a 7.7 per cent gross rental yield in the past year.

Properties at Manoora and Cooktown outperformed the rest in the housing market revealing an average rental yield of 6.2 per cent.

LJ Hooker Edge Hill property manager Amanda Boccalatte said she was initially surprised Bungalow recorded the highest return but narrowed it down to the large number of units in the suburb.

"Sale prices are low but the rents haven't dropped," she said.

"You could buy a unit (at Bungalow) in 1998 for low to mid-$200,000s and you would be getting $220-$240 in rent (weekly)."

Ms Boccalatte said unit sale prices were now $50,000 to $100,000 less but rents were still the same.

With two-bedroom units in demand, Ms Boccalatte believed it was a good time for investors to enter the market.
"It's a great time to invest, prices are low and you are getting a great return," she said.

"Body corporate fees are high but really when you look at the rental return (7.7 per cent), you wouldn't have seen that for the last 10 years."

But Kylie Fullerton, of Taylor Jones Property, said it may not be the best time to rush out to buy a property based on positive rental yields.

While the rental market appeared to be tightening, she was wary to generalise because of a lack of consistency around statistics.

"The rental pool is shrinking," she said.

Ms Fullerton said while interest rates and property prices remained low, investors needed to factor in high insurance premiums and body corporate fees.

"There is a demand for four-bedroom houses with two bathrooms (and) we are finding people are wanting relatively new houses," she said.

Indicative gross rental yields are based on the average annual rent divided by the median sale price in each suburb in the past year.

THE TOP 10 RENTAL YIELDS

UNITS
Bungalow - 7.7 per cent
Woree - 7.2 per cent
Parramatta Park - 7.2 per cent
Port Douglas - 7.1 per cent
Edge Hill - 6.9 per cent
Yorkeys Knob - 6.6 per cent
Holloways Beach - 6.6 per cent
Mooroobool - 6.5 per cent
Westcourt - 6.5 per cent
Manoora - 6.4 per cent

HOUSES
Manoora - 6.2 per cent
Cooktown - 6.2 per cent
Caravonica - 6.1 per cent
Manunda - 5.9 per cent
East Innisfail - 5.9 per cent
Babinda - 5.8 per cent
Bungalow - 5.8 per cent
Cardwell - 5.7 per cent
Craiglie - 5.7 per cent
Westcourt - 5.6 per cent

Article printed by The Cairns Post - 24th July 2012
Writer: Bianca Keegan

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.

Cairns Post - 'North fights for a fair go'

STRATA title insurance holders have stepped up their campaign against premiums in the residential market, highlighting insurance price hikes by companies across the board.

Property Ladder Realty director Linda Tuck claims insurance companies are now setting their sights on non-strata owners.

On the Beach Holiday Apartments - Trinity Beach

Mrs Tuck gave one example of a Cairns landlord who was forced to pay an extra $1150 to insure three units after the cost skyrocketed from $ 450 in 2011 to $1600 in 2012.

“Duplex insurance has doubled, house insurance has gone up, contents insurance has gone up, every bit of insurance everywhere in north Queensland has gone up,” she said.

“I think the only solution is a government insurance office, whether it be federal or state.

“It’s not just affecting Cairns, it’s affecting everywhere north of Rockhampton.” Federal member for Leichhardt Warren Entsch echoed Mrs Tuck’s concerns and said he would introduce a private member’s Bill into parliament demanding that companies that cannot offer affordable insurance in the Far North be banned from insuring anywhere else in Australia.

“The insurance market in northern Australia has failed absolutely, it’s gone way beyond strata title insurance,” Mr Entsch said.

“It is an absolute disgrace at the moment and insurers are doing nothing whatsoever to make it any easier.” Mr Entsch said while some aspects of commercial insurance were not “too grossly affected” by the price hikes, residential, B&B, landlord and rural insurance were not so lucky.

“I’m now getting examples where people can’t even get any strata insurance when, by law, they’re required to have it,” he said.

Mr Entsch dismissed excuses given by insurance providers that the Far North was a risky area to invest in given its recent history of natural disasters.

“We’ve had two events in bloody six years, it’s all bull, quite frankly,” he said.

“They’re still making record profits and in my view, they’re cherry picking.”

It is understood CGU subsidiary Strata Unit Underwriters is the only major strata title insurance provider left in the Far North.

Mrs Tuck said she held “no confidence” in a recent Federal Government inquiry into strata title insurance premiums, labelling the recommendations put forward, including the removal of stamp duty, as “nothing of any real significance”.

Article printed in The Cairns Post - 13th July 2012

Writer: Michael Serenc

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.

Cairns Real Estate Market 'Month in Review'

Herron Todd White provide their monthly review of the Cairns marketplace:

The conventional wisdom is that being a transient city, Cairns has a high proportion of renters in its population, with the counterpart that it has a lower than average incidence of owner-occupiers in its property base compared to other Australian cities. Nevertheless with the slow state of the present market, in particular the investor market, it seems to be intending owner-occupiers that are sustaining the majority of current property market activity.

Owner-occupiers appear to buy across the entire spectrum of property types, whether that be houses, apartments or acreage properties. While represented across the entire spectrum of locations, owner-occupiers appear to show a higher degree of concentration either in the older established suburbs or in areas such as Redlynch.

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"we are seeing some former rental properties being snapped up for owner occupation while the price is right... This is further reducing the supply of rental properties in an already tight rental market..."

With Cairns being a buyers market, we are seeing some former rental properties being snapped up for owner occupation while the price is right. This is further reducing the supply of rental properties in an already tight rental market, and may have the spiralling effect of inducing even more people to buy rather than rent due to the looming rental shortage. However there is also a degree of buyer hesitancy in the apartment market due to the hike in ownership costs arising from higher strata building insurance / body corporate charges.

Source: Herron Todd White 'The Month in Review' June 2012

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.

Cairns Region Market Analysis Provided by the REIQ

Here it is! An analysis of the Cairns marketplace for the January-March period of 2012 provided by the Real Estate Institute of Queensland (REIQ). News which is far and beyond what we could have hoped for; we were the second best performer for house price growth in the state!

House and unit markets
The second best performer for house price growth over the March quarter was Cairns, which recorded median growth of 4.5 per cent to $350,000. Local agents say the region now represents excellent value with demand increasing, especially in the upper end of the market.

Local agents say the market was finally starting to see the re-emergence of confident buyers – however over the March quarter, it was the up-graders at the prestige end of the market that were the most dominant, with sales in the $500,000-plus bracket up.

Access to finance from banks is behind the shift, with banks appearing to prefer clients with greater equity and serviceability, while loan applications at the affordable end are falling over on bank valuations.

As a result, first home buyers are struggling to get their foot in the door. And while investors are only just re-emerging, it is a marked improvement from 12 months ago when there was none at all.

Agents expect property prices to remain stable for the foreseeable future, while sales activity should gradually return to healthier levels.

A more favourable Australian dollar is also providing further stimulus for the Cairns tourism industry and, in turn, the economy and property markets.

Although a strong result for the house market was recorded over the quarter, Cairns’ unit market continues to struggle, with sales down 30 per cent. Its median unit and townhouse price decreased 1.2 per cent to $212,500 over the period.

Comments from various regional zone chairs, Cairns included, say that units are proving difficult to sell, as buyers are put off by the increased costs associated with owning a unit, such as body corporate fees, insurance levies and council rates. As such, buyers end up seeing more value in buying a house, with the ongoing servicing costs equalling that of a unit.

Vacant land market
Over the quarter, the Cairns vacant land market recorded a slight slowdown in sales activity, with fewer land listings coming onto the market.

Whilst there are few listings available, local agents report reasonable buyer enquiry levels, however affordable stock is becoming scarcer. As a result, the overall median for the region increased 6.7 per cent to $160,000 as sales numbers dropped off at Edmonton as well as a slight increase at comparatively more expensive Craiglie.

Rental market
The Cairns rental market has also improved markedly with it recording a vacancy rate of 2.5 per cent as at the end of March compared to 3.8 per cent at the same period last year. Agents from REIQ accredited agencies report a recovery in the tourism industry which is improving employment opportunities and therefore demand for rental property.

“With low investor activity combined with first home buyers struggling to enter into home ownership, the Cairns rental market continues to tighten.”

With low investor activity combined with first home buyers struggling to enter into home ownership, the Cairns rental market continues to tighten. Demand for houses is strong, while less investor activity in the unit market is making supply levels tighter.

Median rent for a three-bedroom house increased $10 per week to $320 between March last year and March this year. The median rent for a two-bedroom unit was steady at $250 over the same period.

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.

State-Wide Market Analysis Provided by the REIQ

The Real Estate Institute of Queensland (REIQ) have provided a state-wide analysis of property market trends with the release of their quarterly Market Monitor report. 

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The report analyses median house, unit and land price movements over the January-March 2012 period and is arguably the most trusted source of such data within the Queensland real estate industry.

Very positive news has resulted from the REIQ's figures showing that the Queensland property market has turned around and posted positive results for the first time in 18 months. The report finds that house prices across the majority of Queensland have increased with sales numbers also up – in some cases significantly.

Three months ago when the REIQ analysed the December quarter data it seemed to indicate the bottom of the market had been reached because prices were stabilising.
The REIQ predicted at the time that the March quarter data would be even more positive and house prices across the state have duly started to increase.

Property prices have grown in most areas and some regions have also experienced substantial increases in sales activity, which is a hugely welcome turnaround.

And while the March quarter figures contain plenty of good news, perhaps the best piece of news is some very healthy results in Queensland’s tourism centres, which have struggled more than most over recent years.

More importantly, the report also provides an in-depth review of all major regional areas throughout the state including Cairns and I will post this analysis for your information shortly. Stay tuned!

Blog post article information sourced from the REIQ Market Monitor Report - March Quarter 2012

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.

HTW Review the Cairns Residential Sales Market

Herron Todd White Cairns provide their analysis of the residential sales market within their national 'Month in Review' publication:

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The Cairns market remains at the bottom of the cycle. That said, the market appears to be consolidating from a dismal 2011, with sales volumes so far this year creeping up and prices at least for houses steadying. Our latest figures indicate a median house price in Cairns of $343,000 during February 2012, only marginally different from the $345,000 median house price recorded in August 2011 but still a sizeable drop compared to the $364,000 median house price recorded twelve months ago in February 2011.

The unit market also appears to be lifting in volumes though prices are being affected by higher strata insurance costs. Investor buyers in particular appear to be factoring these higher costs into the rental return equation and continuing to drive prices lower in order to maintain yields.

"...the market appears to be consolidating from a dismal 2011, with sales volumes so far this year creeping up and prices at least for houses steadying..."

The land market in recent months has been influenced by a large volume of receiver sales of both developer and consumer stock, selling at up to 30% discount to their former list prices. According to our Residential Land Survey, the number of new residential allotments sold in Cairns totalled 249 during 2011, a drop of 41% compared to the 420 lots sold during 2010, and 84% compared to the 1,583 lots sold at the peak of the market in 2007. Our belief is that Cairns land market volumes have reached bottom and are due to slowly recover, but that land sales for 2012 will still be relatively low.

View the full publication HERE

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.

Cairns Real Estate Market Month in Review

Herron Todd White provide their monthly analysis of the Cairns' marketplace:

The Cairns market has a number of elements which, while generally moving in sympathy with each other over the longer term, do have their individual cycles and influences.

As a sweeping generalisation, the Northern Beaches area of Cairns performs most strongly when population migration is it its strongest. This area is a favoured location for southern lifestyle migration. For this reason, the Northern Beaches tends to support an older population demographic than the rest of Cairns, particularly ‘Empty Nesters’ as a result this area sees higher property values than the Cairns average. Interestingly the strongest values on the  Northern Beaches are in the outermost suburb of Palm Cove, indicative of the improving amenity appeal of the beaches the further out from the city.

...Interestingly the strongest values on the Northern Beaches are in the outermost suburb of Palm Cove, indicative of the improving amenity appeal of the beaches...

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Near city suburbs of Cairns such as Cairns North, Edge Hill, Whitfield and Freshwater, are typically regarded as ‘lead indicator’ suburbs of Cairns. These suburbs show a higher degree of immunity to downturns in the Cairns market and conversely, perform strongly during times of strong economic growth. Popular mid-market suburbs such as Bayview Heights, Earlville, Mooroobool, Kanimbla, Brinsmead and Redlynch, are a second tier indicator with similar characteristics.

The rapidly expanding southern suburbs of Cairns are more of a locals market and investor territory, made up of typically younger demographic and a higher proportion of young families. Property-wise, these areas tend to be the swing areas of Cairns, with property price cycles more exacerbated than the Cairns average.

View the full National report HERE

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.

2012 Valuer-General's Snapshot Report for QLD

Click to View the Report

The Queensland State Department of Environment and Resource Management has published its 2012 land valuation report including commentary on key findings. A full copy of the 'Snapshot of the 2012 Valuation' can be found at the departments website HERE.

If anything the Cairns region has faired well in contrast to surrounding regions and proves that local markets continue to "bounce along the bottom of the overall market cycle". A summary of the Cairns region valuation statistics within the Snapshot report follows:

"The weak economy in the Cairns local government area continues to affect the property market. The key industries of tourism and construction are negatively impacted by the strong Australian dollar, a decline in employment, low levels of building activity and 

the severe weather conditions in 2011.

The residential and rural homesite market within the area has experienced historically low levels of sales activity.

Despite this, residential land values overall have 

reduced by just one per cent.

The exception to this trend is higher valued beachfront properties in the area extending from Port Douglas south to the Northern Beaches of Cairns and through to Brampton Beach where reductions in land values of 10 to 15 per cent have been common. Land values in the Gordonvale locality have also been reduced due to the high number of distressed vendor sales influencing the market. Residential land values within Port Douglas have generally stabilised following the declines of previous years.

Distressed sales are also prevalent in the commercial and multi-unit market sectors. The industrial market has softened, driven by decreasing financial returns. Land values in all three sectors have been reduced within the Cairns region."

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.

Cairns Property Market Review by Herron Todd White

A current review of Cairns' property market conditions provided by Herron Todd White in their national 'Month in Review' publication March 2012:

Investors are sadly lacking in the Cairns residential property market at present. However with the market presently showing downward pressure on property prices and upward pressure on rents, rental propositions to investors in Cairns ought to be becoming increasingly attractive.

“Tight rental market conditions, rising rents and ‘affordable’ property prices are providing strong fundamentals for investors. Once the word gets around, please form an orderly queue.”

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In December 2010 the median house price in Cairns was $368,000 and the median weekly house rent $320. Twelve months on, in December 2011, the median house price in Cairns has headed south, to $332,000, while the median weekly house rent has headed north, to $330. Rental yields have thus improved significantly.

Vacancy rates for rental property have reduced considerably over the past twelve months, with the market now sitting at the lower end of the ‘balanced market’ range normally accepted as a 3% to 5% vacancy rate. Houses for rent are in short supply, with a vacancy rate of 2.1% during January 2012, while units recorded a trend vacancy rate of 4%. The overall market vacancy rate stood at 3.1%.

The rental market is expected to come under further pressure during 2012 because of on-going demand and the lack of new private rental housing construction. Tight rental market conditions, rising rents and ‘affordable’ property prices are providing strong fundamentals for investors. Once the word gets around, please form an orderly queue.

View the full 'Month in Review' publication HERE

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.

Recovery Plan Sought for Local Construction

The conditions of property markets in Far North Queensland are perfectly typified by the relative health of the local building and construction industry. Following the effects of the global financial crisis in 2007 the rate of new dwelling approvals in Cairns urban area took a significant hit. Despite a slight recovery in approvals experienced during 2009, throughout the past 12 months approvals have remained at a virtual standstill.

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As illustrated by the graph opposite, the current trend number of new dwelling approvals in Cairns urban areas sits well below 50 per month with almost no new units approved. Industry analysts assert that a minimum trend of 50 approvals per month is required for the region's building industry to prosper.

The Cairns Post recently reported on publication by the Urban Development Institute of Australia (UDIA) showing that $318 million has been wiped off Far North Queensland's economy in the past three years from the downturn. The UDIA also outline within their report critical actions required in order to return prosperity to the building sector.

Roadmap for Recovery in Cairns' Construction
The Cairns Weekend Post - 25th February 2012

A DEVELOPMENT hit-list has been drawn up to turn around a $300 million downturn in the Far North's construction industry.

A report by the Urban Development Institute of Australia shows that $318 million has been wiped off the region's economy in the past three years from the downturn.

UDIA Queensland president Matthew Wallace said the institute had 16 critical actions which it considered pivotal to restoring the prosperity of the sector.

"They include an overhaul of the prevailing planning culture and review systems in Queensland to deliver quicker and less costly outcomes, short-term removal of stamp duty on off the plan sales, greater leadership in the delivery of infrastructure and a senior government taskforce to undertake a training strategy to grow the construction workforce," he said.

"We now need decisive action from the incoming Queensland government to turn industry conditions around and harness the economic potential of the sector.

The report found that there had been a 26.4 per cent decline in construction in the Far North in the past three years – double that of the state decrease.

It said in the last financial year 846 dwellings were approved in the region, less than a third of the total in 2007-08 of 2994.

Despite the downturn, the region's industry remained a major employer, accounting for 10 per cent or 12,300 jobs.

Far North UDIA president Gerard Obersky said the Government had created a system that was "inefficient, prohibitive and layered in overlapping departmental assessment or consideration".

"As a result, the costs from these problems are continually spiralling. The planning process has been complicated to a point where delays, taxes and the subsequent cost of this process are making housing unaffordable," he said.

LNP candidate for Cairns Gavin King said the party had elevated the property and construction sector as "one of our top economic priorities".

"Many of the recommendations by the UDIA have been adopted and released as part of the LNP's property and construction strategy," he said.

Labor candidate Kirsten Lesina said Queensland had the lowest standard transfer duty rates of any mainland state and the Building Boost was having a direct impact on the new housing market which included a $10,000 grant for all new homes under $600,000, plus the $7000 first home buyers' grant.

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.

No End in Sight for Tightening Rental Home Market

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As well predicted, the availability of rental homes throughout the region is becoming an increasing concern for prospective tenants. The Cairns Post today reported another decrease in the vacancy rate with an increase in median rents and the key economic indicators are clearly telling us that this trend will continue throughout 2012.

Building approvals in the construction industry remain at an alarmingly low rate; certainly not enough to accommodate the continually growing local population. Almost every day it seems as though I am hearing from prospective tenants who are finding it increasingly difficult to find suitable rental homes.

One must ask with median rents expected to rise substantially throughout the year and fewer rental homes available; will prospective tenants shift their sights toward the deflated sales environment currently offering an attractively wide range of opportunity?

Cairns Rental Houses in High Demand

The Cairns Weekend Post - 11th February 2012

PEOPLE hunting for a house to rent could be facing longer waits as vacancy rates in Cairns continue to tighten.

The latest Real Estate Institute of Queensland report says Cairns’ vacancy rate dropped from 3.1 per cent in the September quarter to 2.8 per cent in the December quarter.
The median weekly rents for two bedroom units and three bedroom houses recorded an increase of $5 or $10 over the quarter.

Despite a "slight" unit oversupply, demand for houses is strong with many agents beginning to exceed supply.

TNQ Rentals owner Karin Riley said her agency only had two vacant houses out of more than 450 properties on the books.

"Houses are doing extremely well and tenants seem to prefer a house over a unit at the moment," Ms Riley told The Weekend Post.

"The unit market is suffering a little but in saying that if the property is well presented, fresh and modern, they’re attracting people."

The latest Australian Bureau of Statistics housing finance figures found the number of investors in Queensland increased by more than 16 per cent over the month but the report could not provide a regional breakdown.

This return to investor activity, while still slightly below average, is also being driven by the lower interest rate environment that is now in play, REIQ CEO Anton Kardash said.

"After being in hibernation for most of 2011, investors are starting to return to the market with REIQ accredited agencies also reporting a more buoyant mood since about November," he said.

"These tentative signs of recovery, however, can only be sustained if confidence levels continue to improve. The key to this is having an interest rate regime that reflects and supports the economic reality of the majority of businesses in Australia."

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.

Cairns Property Market - HTW Month in Review

Herron Todd White Cairns provide their analysis of current property market conditions in the company's national 'Month in Review' publication. Minimal change in general market conditions observed however positive outlook for rentals reaffirmed.

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THE Cairns residential property market remains steadfastly at the bottom of the property market cycle, and while there is light at the end of the tunnel, we are not expecting big things to happen in the market during 2012.

Conditions in the local economy are slowing getting better, but it is taking a long time for these to filter into improvements in consumer confidence which is needed to resurrect the local property market. The building industry also remains at a low ebb, with a dearth of new housing construction projects inside Cairns, particularly of units.

However one comfort factor is that vacancy rates for rental property have tightened further over the past twelve months. according to our Herron Todd White rent roll survey, vacancy rates for houses have come down from a trend level of 4.% in December 2010 to 2.2% in December 2011, while those for units have come down from 4.8% to 4.1% over the same period. In addition the December quarter saw average rents show an increase, rising by about $7 per week compared to September.

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Tight rental market conditions, rising rents and affordable property prices will provide the pre-conditions for the market to enter modest recovery mode during the next twelve months.

View the national report in full here

Peter Musso - Ray White Cairns Beaches - Licensed 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

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 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

WHAT ARE THE CURRENT MARKET CONDITIONS?

On Tuesday 19 April, 2011 commencing at 6:00pm Ray White Cairns Beaches will host another of its highly popular 'Sellers Information Seminars'.

A number of qualified guest speakers including valuers and industry analysts will cover a range of topics and questions from the floor.

The night aims to provide property sellers and buyers alike with the information that they require in order to make informed and educated decisions within the current local marketplace.

If you might be interested in attending please contact myself on 0425 713 700 or peter.musso@raywhite.com.

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

VICTORIAN INVESTORS ASSURED

Victorian-based investors in North Queensland property have been reassured that the residential real estate market in the Cairns region “will come back”.

Ray White Cairns Beaches Director Paul Stirling has held seminars in Melbourne this week with existing property owner clients to update them on the current state of the market.

Mr Stirling said Victorian investors were crucial to the long term future of residential property in North Queensland as they made up approximately 30 per cent of the investor market.

“Our meetings here in Melbourne with North Queensland property investors have been well received,” he said. “We have held three presentations with mostly existing investors. We provided them with facts and figures on where the market was from 1990, its growth patterns since then, where it is now on the ‘Property Clock’ and what the current economic indicators are pointing to in the near future.

“Many of these people are long term investors who have owned property in the Cairns region for between three and 10 years. They appreciated that we made a 4,000km journey to meet them face to face and bring them up to speed. Favourable comments were received regarding the content and factual nature of the seminar information – in particular the figures on vacancy factors in a rental market that is beginning to tighten from a balanced status."

“Our advice is that we feel the market has bottomed and there is growing confidence that the market will come back. “We’ve just given them the clear cut information to make a decision they’re comfortable with. If you don’t have to sell then don’t sell, unless you can use the yield for better purposes or investment elsewhere.”


Mr Stirling said he and the office’s business development manager Rachel Blok were breaking new ground by meeting with more than 60 investors during their Melbourne visit. “We held investor seminars last year in Perth and early next year we will be holding them in Sydney,” he said."

“It’s a good opportunity to provide an update on the residential market and information from a property management perspective to our long term investment property owners. But we also take the opportunity to meet potential new clients and we host a small function where owners can meet in a relaxed atmosphere.”

www.raywhitecairnsbeaches.com.au

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