Accommodation Occupancy Rates Best in Five Years

Throughout recent months I have had this statement affirmed to me by many local complex managers; all claiming to have had their best previous 12-month period since the GFC. I am told by most managers that since 2010 each year has shown a marked improvement in trend occupancy rates in turn positively influencing the nightly room rates achieved. This is welcomed news for many owners of holiday apartments who have been hit with a double-edged sword following the GFC with decreased returns and also increased expenses almost exclusively associated with rising strata-title insurance levies.

HOTELIERS in the Far North have had their best three months of occupancy rates in five years.

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The latest edition of the Tourism and Transport Forum-HOSTPLUS National Accommodation Barometer shows continuing strong demand for accommodation in Australia.

Forum chief executive John Lee said the industry was benefiting from the relatively strong Australian economy and popularity of short breaks.

“Demand for accommodation in our capitals, along with the Gold Coast and Cairns, is very strong at 81.3 per cent for the September quarter, on par with the same period in 2011,” he said.

“Pleasingly, Cairns saw an occupancy rate of 76.6 per cent for the quarter.

“Port Douglas saw very strong revenue per available room growth compared with the September 2011 quarter.”

Accor’s Cairns hotels finished last year with an average occupancy for its city hotels of 80.1 per cent, up more than 1 percentage point on 2011 and almost 9 percentage points ahead of the overall Cairns market.

A stand-out performed for the group was the Pullman Reef Hotel Casino, which achieved its highest occupancy on record, averaged 84 per cent for the year.

Pullman Reef Hotel Casino general manager Wayne Reynolds said the strength of occupancy last year augured well for this year.

“...We saw an increase in meetings and conferences, along with growth in domestic leisure and inbound business, particularly from China...”

“Pleasingly, we saw an increase in meetings and conferences, along with growth in domestic leisure and inbound business, particularly from China,” he said.

Article printed in The Cairns Post – 31st 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 rental prices rise by $25 per week

AVERAGE house rentals in Cairns have increased by $25 a week and are likely to rise even more as the accommodation squeeze worsens, forcing more people to live in caravans or couch-surf as they wait for affordable properties.

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The latest CairnsWatch snapshot also shows unit rentals rose by $15 a week in the year ending September, an increase also attributed to the shortage of lease properties.

The release of the report comes as property managers say people are living at caravan parks because they are struggling to find rentals.

"We're still getting population growth, even though it's slower than normal, and there is a very finite supply of housing," Herron Todd White director Rick Carr, who authors the monthly report, said.

"Empty-nesters are still coming up from Sydney and Melbourne and other places for lifestyle reasons."

The survey shows the city's vacancy rate for houses was 1.7 per cent, while just 2.9 per cent of units were available for lease.

The average house jumped from $325 a week to $350 in the year ending September. Units increased from $240 to $255.

The rental squeeze has pushed more tenants -- mainly youths, single mothers and separated middle-aged people -- to seek help from welfare agencies such as The Salvation Army and OzCare.

Salvation Army Lieutenant Darren Kingston said: "It seems that we are getting busier and busier with people seeking accommodation.

"People have moved up here and found they haven't been able to afford mortgage repayments or the increase in rents. We're getting people in our welfare centre saying it's just too hard."

Lt Kingston said people stranded between homes often resorted to sleeping on couches at friends' homes.

Elders Real Estate Cairns senior property manager Tegan Hicks said securing a rental was highly competitive.

"We cannot keep up with the demand for houses to rent at present," she said.

"Units, if they are presented well and priced right, will rent quickly. Some tenants are living in caravan parks because they cannot find suitable rental properties."

Mr Carr said the property shortage appeared likely to continue over the next year.

The report shows only a slight increase in housing approvals last month.

"There haven't been any unit developments approved for a very long time," he said.

Article printed by The Cairns Post - November 3rd 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.

Hotel Room Rates Set to Rise

Recent media coverage of the room rates for accommodation in the Far North has provided some hope to owners of holiday-style apartments. Throughout the past 3-4 years domestic tourism arrivals figures have maintained trend growth however in order to remain competitive many hotels have been forced to reduce their room rates by considerable amounts ultimately affecting the profitability for apartments and unit owners well-below historical returns. 

With holiday occupancy rates now showing considerable improvement local operators are now able to increase their room rates in order to restore profitability. A recent study suggests that hotel occupancy rates in Far North Queensland should return to pre-GFC levels within the next 3 years with the price of rooms to rise by 4.5 per cent.

Article text: The Deloitte Access Economics Tourism and Hotel Market Outlook released today shows average annual room occupancy rates in the Far North have improved to 58.1 per cent, but are still 5.5 per cent lower than they were five years ago.

The report said the average room rate would rise by 4.5 per cent to reach $132 by the March quarter of 2015, while the revenue per available room would also rise by 9.1 per cent.

"While growth in room rates and yields are expected to be relatively strong over the forecast period, they will remain considerably lower than the levels prevailing in the capital cities and broadly similar to other regional destinations," the report said.

Mercure Cairns Harbourside general manager Shane Edwards said there had been a noticeable increase in visitors since May.

"Occupancy has been quite strong certainly for the last three months and we’re more optimistic than this time last year," he said.

The Far North’s lower room prices will also help increase occupancy.

"Occupancy rates are forecast to reach 66 per cent by the March quarter 2015, driven among other things, by room rates which are considerably below those witnessed in other parts of the nation," the report said.

Mr Edwards agreed, saying room prices were still well below other Australian cities.

"If I look at average rates in 2005 they’re certainly nowhere near what they were back then," he said.

"I think if volume is consistent then rates will slowly start to increase in line with other cities."

The direct flights from China along with November’s solar eclipse have also given hotels confidence they will stay full beyond the traditional high season.

"With the extra people coming in it can only get better and we’re quite excited about it, usually when you see a dip we’re hoping that occupancy levels will stay high," Mr Edwards said.

Tourism Tropical North Queensland chief executive Rob Giason said the past six months have seen good growth and sustained occupancy.

Article posted by The Cairns Post - August 30th 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.

Cairns Post - Rental Squeeze Hits the Pocket

SECURING a rental property in Cairns is becoming even more competitive, the latest real estate industry figures say.

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The Real Estate Institute of Queensland released the June quarter residential rental vacancy yesterday showing Cairns rentals are still in high demand.

The vacancy rate is 1.9 percent, dropping from 2.5 percent in the March quarter, the report found.

REIQ chief executive Anton Kardash said property managers were reporting tighter rental conditions because of low investor activity.

He said rental stock was also depleted because of investors selling their properties and landlords choosing to live in their own investment properties.

"The first three months of the year are generally the busiest in the Queensland rental cycle so we see vacancy rates particularly low during this period of time," he said.

Local real estate agent Debbie Aldred said rental prices would continue to rise because of increased demand.

"The unit vacancy rate is dropping quite rapidly," she said.

"The problem is there has been no building in the last five years and there are still plenty of people coming into town."

"It's quite a problem, we desperately need more houses to rent," she said.

Ms Aldred said rental arrears has also increased with some tenants unable to afford the increases.

Article printed by The Cairns Post - 21st 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 Rental Vacancy Rate Approaching Stress Level

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Further coverage concerning increasingly strengthening local rental market conditions and for good reason - Herron Todd White released their monthly report for June showing that the overall Cairns market vacancy rate of 2.1% is fast approaching the sub-2% 'stress level'. Article printed in The Cairns Post this week:

THE shortage of rental properties in Queensland's Far North is expected to bring investors and developers back into the market.

Property researcher Rick Carr said the rental vacancy rate in Cairns was just 2 per cent.

He said if it fell below 2 per cent it would be reaching "almost stress levels" and if it continued in the next 12 months then the lack of properties for rent would reach "crunch time."

"There is very little new supply. There are virtually no new rental units under construction," Mr Carr said.

"Rents are starting to climb and in the past 12 months houses have gone up by $10 a week and units by $5 a week and they will continue to climb," he said.

Mr Carr, the research director of Herron Todd White in Cairns, said he expected rents to rise by up to $30 a week in the next 12 months.

"It's creating a very good equation for investors to come into the Cairns market," he said.

"There is very little new supply. There are virtually no new rental units under construction." 

Mr Carr said there was a time when a $350,000 house returned $350 a week in rental income, and while that house was now worth $320,000, the rent had risen to $360 a week.

"The rental return for investors is continuing to improve, however, there is very little capital growth in the rental proposition," he said.

Mr Carr warned that Cairns was facing competition elsewhere with rental property shortages in Townsville, Mackay and Rockhampton where it was more suited to the mining industry.

He said it was up to Cairns investors to initiate the demand to attract out-of-town buyers.

Mr Carr said last year there were just 112 new unit sales, down from 1600 in 2007.

Real Estate Institute of Queensland Far North chairman Greg Clyde-Smith said there was definitely a shortage of houses for rent.

"Some developers are making noises about building unit complexes but there is still an over supply of apartments," he said.

Mr Clyde-Smith said demand for houses was high.

Article printed in The Cairns Post - Thursday 28th 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.