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.

National Housing Shortage to Fuel Unit Demand

A recent report produced by the National Housing Supply Council (NHSC) has reaffirmed signs that Australia’s chronic property shortage is set to be one of the key issues underlying the real estate market for years to come.

The NHSC’s report titled the ‘State of Supply Report 2011’ shows that Australia's overall shortage of dwellings currently sits at 186,800 and is projected to hit 640,000 by 2030.

In terms of sheer numbers, the largest housing shortfalls are in NSW and Queensland, says the report, with shortfalls of 73,700 and 61,900 respectively.

Key factors behind Australia's national housing shortage include:

• The country's high rate of population growth;
• A weak post-GFC construction market;
• Australia's ageing population;
• Significant growth in the number of lone-person households; and
• Significant growth in the number of households containing couples without children.

The report states that as a result of these underlying factors, the NHSC expects higher density housing to increase in popularity in the coming decades.

"Most regions are projected to see a greater relative increase in demand for flats, apartments and townhouses than for detached houses," says the report.

Far North Queensland is one of the fastest growing regions in the State. Between 2001 and 2006 FNQ had the third highest growth rate and absolute growth outside South East Queensland. This growth has largely been driven by net migration, with natural increases remaining relatively steady.

Current population projections for FNQ to 2031 are shown in the second graph. High, medium and low series projections have been prepared to consider a range of potential future outcomes.

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Key finding of the recent NHSC 'State of Supply Report 2011' report include:

• Despite weaker market conditions, the housing shortage continues to widen.
• Underlying demand for housing grew by an estimated 159,200 dwellings in the year to 30 June 2010 – slightly more than the 156,500 forecast in the 2010 report.
• Net additional housing supply  increased by 131,000 dwellings over the same period, below the 140,700 projected in the 2010 report.
• The gap between these measures of underlying demand and supply increased by 28,200 to 186,800  over 2009-10.
• The largest housing shortfalls in numerical terms are in NSW and Queensland, with shortfalls of 73,700 and 61,900 respectively.
• Relative to the size of its market, the largest shortfall is in the Northern Territory, where the Council estimates the shortfall to exceed 10 per cent of total underlying demand.
• Data from the states and from the Council’s analysis of recent building approvals data suggest that supply is likely to fall short of the medium-growth projections (meaning a larger gap) in the short term.
• Projections, based on trend building rates and household growth, suggest that this gap could increase to over 640,000 over the next 20 years .
• This growing gap indicates that housing production needs to lift well above trend to reduce the likelihood that housing shortages and poor affordability impact adversely on economic growth and standards of living.

View the full ‘State of Supply Report 2011’ report at the NHSC website 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.

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.

POPULATION GROWTH FIGURES REVISED UPWARD

THE Far North's population is predicted to grow by a third, nearly 100,000 more people or 5000 a year, in the next 20 years.

The State Government has revised its anticipated population growth for the region with the number of people living in the Far North to top 373,000 by 2031, 28,000 more than the 345,000 figure predicted three years ago.

The Far North’s population stands at 278,000.

It will make the region the biggest population centre outside the southeast corner, ahead of north Queensland (from 237,461 to 346,263).

Population growth is a major underlying factor for the demand of housing and activity within property markets. Cairns now needs to address the issue of low local housing affordability and the current under supply of new dwellings.

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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