Report says Cairns hotel industry will rebound

A NEW economic report forecasts a strong future for the Far North's hotel industry with steady improvements in occupancy rates and room prices after being in the doldrums for the past four years.

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The outlook, by leading economic advisory firm Deloitte Access Economics, says the improvements in occupancy rates and room prices indicate "a strong performance for one of Australia's most significant tourism regions" by June 2015.

There are at least 5328 hotel and resort beds, not including apartments or motels, in the region with the current average occupancy of 58.8 per cent predicted to rise to 66 per cent in three years and the average room rate rising from $117 to $131.

The report says occupancy rates are continuing to recover from the decline in Japan and natural disasters.

"Among other positive signs, the decision of China Eastern to commence flights to Cairns will have a positive impact on visitation and hence hotel market performance in the region," the report says.

"However, while occupancy rates have rebounded, they remain well off the levels experienced prior to 2008 and it is likely to take some time before they return to their pre-global financial crisis heights."

The report says by June 2015 occupancy rates are forecast to reach 66 per cent but warns that it will be "heavily reliant on" increases in international visitors.

Melbourne friends Malorie Raymakers, Mikaela Prentice and Emily Arnott are domestic travellers contributing to the region's economy.

"We've come for Schoolies because we decided the party scene on the Gold Coast wasn't really for us," Miss Arnott, 17, said.

It has been a strong holiday season for the region, boosted by the solar eclipse two weeks ago and the arrival of the first direct flights from China.

Queensland Hotels Association Far North accommodation division chairman Peter Blackburn said the signs were pointing to a better future but warned there were still some drawbacks.

"UK, Europe and US will continue to be restrained by their weak economies and the group market from Japan is restricted by air access," he said.

"China will continue to grow as long as direct flights are maintained after the end of the trial period." Hilton Cairns general manager John Lucas said the five-star segment was doing the best.

"These numbers reflect the overall accommodation sector, however, the five-star market is showing greater strength," he said.

Herron Todd White research director Rick Carr said the report was "encouraging".

Mr Carr said, despite the high Australian dollar, Australians were returning to the Far North to holiday.

Article printed by The Cairns Post - Thursday, November 29, 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.

The Cairns Post: Things Are Looking Up

Rob Gaison, the chief executive officer of Tourism Tropical North Queensland, recently took the opportunity to write to the Cairns Post highlighting his confidence that the local tourism industry has finally "turned a corner". His following article provides a timely account for the past, present and future outlook for local tourism including good reason for his renewed positivity following particularly difficult recent times experienced by Cairns' most valuable industry.

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The total solar eclipse crossing Far North Queensland today is the icing on the cake for our region.

We have has the best tourism season since the global financial crisis decimated the number of travellers worldwide and, happily, the strong visitor figures are continuing into our shoulder season.

With an estimated 60,000 visitors in tropical North Queensland for the once-in-a-lifetime experience of the moon blacking out the sun, more than 20 million people logging onto live broadcasts of the event and the surrounding publicity, we are centre stage before a whole new audience.

Never before have so many eyes been upon us, so we have grasped this opportunity that nature has presented us to remind both old friends and new travellers that centre stage is where we should be.

Far North Queensland offers many once-in-a-lifetime experiences. We have the world’s largest reef and oldest tropical rainforest.

We are the only place where two World Heritage areas are side by side and there are more than 650 daily touring options to explore these natural wonders.

Higher visitor numbers will bring a renewed interest in redeveloping attractions and building new infrastructure. Just last week Double Island and the Sea Temple Golf and Country Club at Port Douglas sold.

"It is no coincidence that this investment comes on the back of renewed optimism in tourism."

It is no coincidence that this investment comes on the back of renewed optimism in tourism.

Tourism is the economic driver of this region, generating seven million export dollars a day, employing 32,000 people and, importantly, introducing business and lifestyle opportunities to a new audience.

Tourism Tropical North Queensland has set bold goals, but our strategy to increase the value of tourism to our region by $1 billion to $3.2 billion in 2015 is on track.

Our marketing push has been enhanced by the State Government’s new direction of destinational funding and acknowledgement of regional tourism organisations.

We have been buoyed by the start of direct flights from China last month which are poised to take us towards our goal of 200,000 Chinese visitors by 2015.

The October CairnsWatch report further justifies the positive outlook for our economy.

Domestic airport arrivals increased by 7.7 per cent in the year to September and accommodation occupancy rose during the last quarter to 65.3 per cent.

Our strategy to diversify tourism into areas such as sporting events is paying dividends with the success of the Cairns Ironman boosting visitor numbers and 22 more events, including the Inaugural Great Barrier Reef Masters Games, poised to inject millions of dollars into the region.

The good times will not be fleeting. We are counting down to Chinese New Year, another peak period of demand.

In between, and beyond, our 2015 goals are firmly in mind with co-ordinated campaigns in key markets such as Japan where we are seeing growth.

Events such as Corroboree in May next year, which brings 300 Australian specialists to Cairns from Europe and the UK, will supercharge awareness of our region into the future.

A determined focus, hard work and nature’s helping hand have brought out the best in Tropical North Queensland.

Article published by The Cairns Post - 14th November 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.

Petition for Action on Strata Insurance Premiums

The Federal Government's failure to implement the recommendations of a bi-partisan Inquiry into strata insurance price hikes has led to the launch of an online petition by North Queensland residents. The petition will be sent to insurance companies, the Insurance Council of Australia and state and federal MP's.

View page here to sign the petition:

www.change.org/queenslandinsurance

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.

Multiple Offers on a Property

This isn't exactly a topic specific to real estate in Cairns and Far North Queensland however it is something which I find myself discussing regularly with people; multiple offers on a property.

In the event where a property is listed for sale by private treaty (with an asking price) and more than one buyer expresses interest in making an offer to purchase, each of these buyers will be advised that there will be another offer in consideration and that the offer with the most attractive price and terms to the seller will be accepted.

To maintain fairness each of these buyers cannot know the price or terms of the other offers and must simply make their best offer in hope that it is accepted over all others.

This is at odds with a property which is listed for sale by auction whereby all bids (offers) are made in a public forum and each buyer is aware of exactly how much more they will need to offer in order to purchase the property. This method of sale through the bidding process will almost always produce the highest possible purchase price.

The Real Estate Institute of Queensland (REIQ) recently released a statement discussing this topic and also clarifying the legal obligations of the real estate agent during the multiple offer process:

The REIQ often receives queries from consumers about multiple offers on a property. A multiple offer occurs when more than one prospective buyer makes an offer on a property by submitting a Contract of Sale.

Multiple offers often happen in a seller’s market when competition for residential property is greatest and there are more buyers than there are properties for sale. However, it can occur in any market and especially for properties within an affordable price range.

Occasionally prospective buyers have alleged that agents tell them there is another offer on the property in order to secure a higher price for the seller, when in fact there is no competing offer.

There are heavy penalties for agents who mislead or deceive buyers by telling them there are competing offers when there are not.

When a seller is to be presented with multiple offers, a prudent agent will inform prospective buyers of that fact in writing and obtain a written acknowledgement. This gives potential buyers an opportunity to submit an offer if they have not already done so, or to revise an existing offer that has not yet been accepted by the seller.

Real estate agents have an obligation under the Property Agents and Motor Dealers Act to submit all offers that comply with the seller’s instructions to the agent.

Exceptions occur when, for example, the seller instructs their agent not to submit offers under a certain dollar figure.

Agents also have a statutory obligation to attempt to get the highest possible price for the seller. The law further requires that agents be fair to buyers.

Buyers should also be aware that sellers will examine all the terms and conditions of each offer before deciding to accept or reject any particular offer. The conditions can make certain offers more attractive for reasons other than the proposed price alone.

Some sellers may be prepared to accept a lower price if the offer is unconditional rather than take the risk that a higher offer may not proceed to settlement, because of the special conditions required by a buyer.

Statement posted by the REIQ on the 13th of August 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: 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.

Federal Gov Supports Probe into Strata Insurance

A HIGH-LEVEL investigation into the massive hike in body corporate insurance premiums and a moratorium of the State Government's stamp duty on the insurances have been recommended by the Federal Government.

The recommendations have been agreed to by the Federal Government in its response to an investigation into increases in residential strata title insurance premiums in Far North and north Queensland.

Cairns One Apartments

Two key recommendations are:

1. Calling on the Australian Government Actuary to undertake a rigorous investigation of the causes of the recent premium increases.
2. Supporting the committee's recommendation that the State Government introduce a 12-month moratorium on stamp duty charged on strata title insurance in north Queensland.

But for one northern beaches apartment owner, who asked not to be named, it has come too late.

Her latest body corporate fees for the quarter are $2172.25, a $736.27 hike to pay for the mandatory insurance premium for their complex of $37,000, up from $9800 in 2009.

"The bill is unbelievable. This is just out of control," she said.

"The last one was $1435.98 with discount if paid before the due date of $1292.38 which I managed to scrape together and pay. But not this time, it's just not possible I'm feeling totally devastated."

A House of Representatives committee investigated the insurance industry during disaster events and held public hearings in Cairns and Port Douglas earlier this year.

The inquiry included an examination of the affordability and availability of residential strata title insurance in the region after concerns were raised about the rising body corporate insurance costs.

Cairns-based Senator Jan McLucas said the strata insurance market was failing and unit owners, body corporate managers and real estate agents had faced a difficult predicament in recent years.

"Our goal is to encourage insurers back into this market and as a result increase competition."

"Our goal is to encourage insurers back into this market and as a result increase competition."

Senator McLucas said the insurance industry had agreed to provide the Australian Government Actuary with the data it needed to undertake the analysis and would report to the Government by September 30.

But member for Leichhardt Warren Entsch says the Government's recommendations regarding hike in residential strata title insurance is tokenism and have let down the region.

"There is clear evidence of gouging, the insurance companies are using relatively minor events in North Queensland as an excuse to walk away and cherrypick profitable markets,'' he said.

Article printed by The Cairns Post - Friday 29th 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.

Solution Demanded to Stop Soaring Strata Insurance

The following article was posted in the Australian Property Investor addressing what has proved to be a real sticking point for buyers and sellers of strata-titled properties in North Queensland lately.

With only two (2) insurers remaining willing to cover the vast majority of apartment complexes in the Far North it is clear that the market for strata-titled insurance has failed and measures need to be taken in order to restore competitiveness to reduce costs to rate payers.

THE Queensland Government has until December 1 to announce how it will bring affordable insurance back to the north and far north Queensland region, according to Federal Member for Leichhardt Warren Entsch.

Thousands of unit owners in north and far north Queensland are becoming crippled by hiking strata insurance costs, as insurers blanket ban strata insurance coverage simply to minimise their exposure to cyclone-prone coastal areas, in many cases north of Mackay.

Unit owners are angry because on buildings valued at $5 million-plus they’re left with the choice of only two insurers – a duopoly – translating to escalating costs on what is a mandatory insurance obligation for body corporates.

The other insurers who’ve dropped like flies from the region have not considered each suburb and area on a case-by-case basis or even the structural integrity of a building and its ability to withstand a cyclone; or if a building has ever been damaged by a cyclone.

Entsch said since a public inquiry took place in late January, he’s heard many stories of insurance quotes that have skyrocketed.

“One letting agent in Cairns, Linda Tuck, reported that last year the cost of insurance for a two-bedroom, one‐bathroom duplex with a value of around $350,000 was $941,” said Entsch.

Federal Member for Leichhardt
Warren Entsch 

“This year, she was told that the insurer… had withdrawn from domestic property insurance for all locations above Mackay.

“With only two insurers willing to quote, the prices jumped to the ridiculous level of $4803… and $4439 with (the other two insurers).”

In his speech to parliament recently, Entsch made it clear the market had “clearly and totally failed”.

The Federal Government has until October 1 to complete the reviews recommended by the Standing Committee on Social Policy and Legal Affairs as tabled in its second In the Wake of Disasters report in March.

The government then has until December 1 to outline its solution on how to reduce the insurance costs for unit owners and make policies more competitive again.

View article source 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.

Queensland Tourism Centres Post Healthy Growth

The RIEQ (Real Estate Institute of Queensland) has reported that Cairns was the second best performing region in Queensland for the March quarter behind the Fraser Coast noting a 4.5% increase in median house price.

REIQ Cairns zone chair Greg Clyde-Smith said the market was finally starting to see the re-emergence of confident buyers with up-graders at the prestige end of the market showing dominance.

The REIQ Market Monitor report for the March quarter will be published in early June to reflect such positive figures… speaking with buyers on the ground there is a certain improvement in market sentiment though it will be interesting to see whether the Tourism centres such as Cairns and the Fraser Coast will be able to maintain positive figures over other major centres throughout the remainder of 2012... stay tuned!

Tourism centres post healthy growth

REIQ Insider Blog – May 21^st 2012

The REIQ March quarter median house price report has found the top performer of all major regions across the State to be Fraser Coast, which posted median house price growth of 7.8 per cent to $290,000 over the March quarter. The numbers of preliminary house sales were also up an impressive 42 per cent. Local REIQ agents say the region had benefited from a busy Christmas period as well as an increase in buyers prepared to buy due to the affordability of property in the area.

REIQ Fraser Coast zone chair Linda Bland said the March quarter has been characterised by a slight increase of sales in the $500,000-plus bracket.

“We have experienced additional demand in the upgrader market, which is predominantly coming from owner-occupiers,” she said.

“This can mainly be attributed to the softening of prices that has occurred at the upper-end of the market over recent years which is attracting buyers looking for excellent value for money.”

Buyers were generally still looking for the best opportunities available, she said, which many remaining price conscious.

“We are also starting to experience some increasing levels of confidence with many people starting to believe that the worst of the economic conditions could be behind us,” she said.

Maryborough performed well over the March quarter with its median house price increasing 3.4 per cent to $212,000 over the period.

A solid performer over the year ending March was Scarness which posted median price growth of 5 per cent to $308,750.

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

REIQ Cairns zone chair Greg Clyde-Smith said 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.

“Sales in the $500,000-plus bracket were up compared to the previous quarter, while the affordable end languished somewhat,” he said.

“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.”

Mr Clyde-Smith said he expected property prices to remain stable for the foreseeable future, while sales activity should gradually return to healthier levels.

“All of this does however hang on the need for further interest rate cuts – without which the wind will be taken out of property market sails once again,” he said.

“A more favourable Australian dollar will also provide further stimulus for the Cairns tourism industry and, in turn, the economy and property markets.”

View article source 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.

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.

Keeping Momentum on Strata-Title Insurance Inquiry

A formal parliamentary report on insurance costs was recently submitted to the government detailing a series of recommendations in response to the inquiry meetings held throughout Far North Queensland. Very interesting was the final recommendation which calls for the government to "outline the plan of reforms it will undertake with the Queensland Government to establish a competitive and affordable insurance market for residential strata title insurance, with a focus on North Queensland..."

Insurers Face Fresh Scrutiny

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The Cairns Post - March 23rd 2012

THE pressure must stay on insurance companies and government if recommendations to address the spiralling costs of body corporate insurance are to have any chance of success, Far Northerners say.

Late Wednesday, the Federal Government’s Social Policy and Legal Affairs Committee released a series of recommendations in response to the inquiry that visited Cairns and Port Douglas in January.

Yesterday, chairman Grah-am Perrett said the committee had heard stories of "heartache, stress and despair".

Mr Perrett said a number of factors did not add up when looking at the increases, from the insurance industry’s claim reinsurance was to blame, to body corporate manager commissions, to the fact building codes had improved in the past 30 years yet a massive leap in premiums had taken place.

Leichhardt MP Warren Entsch, who pushed for the inquiry along with Cairns-based Queensland Senator Jan McLucas, said the recommendations "were not a silver bullet".

"I have been dealing with property owners who are struggling to keep their homes after being hit with strata title insurance increases of up to 1000 per cent," he said.

"Some people have had to borrow just to pay their insurance and if they’re faced with the same premiums next year, it’ll tip them over the edge."

Cairns Chamber of Commerce president Anthony Mirotsos said it was encouraging that the committee had put forward a substantive action plan with "tangible outcomes and deliverables".

"It puts insurance companies on notice that this is being investigated and we’re not just going to continue handing out cheques," he said.

Sue Chapman, manager of Verandahs Boutique Apartments at Port Douglas, said it was important to keep the pressure on.

"They’ve gone out and sourced information from a huge area, they’ve come to us, they’ve actioned it very quickly so now it’s absolutely vital that we keep the momentum going," she said.

Cairns unit owner Ian Jamieson saw nothing to alleviate the hardship people were facing.

"I can’t see the insurance companies reducing their prices so the crisis remains, it’s just bad news for investment in Cairns for people on fixed incomes."

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.

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.

Will the resources sector continue to 'boom'?

Although not directly associated with the unparalleled increase in value of the mining industry seen in many parts of Australia, Cairns' property markets have experienced an indirect benefit through a growing number of workers seeking housing in the region as a fly-in fly-out basis for their employment in those mining areas.

In this way, Cairns is set to benefit as the closest Australian port to Papua New Guinea and it's significant mining prospects, including current operations in central and northern Queensland and even in areas of the Northern Territory.

Tim Lawless, head of the research and analytics team at RP Data, recently reported on information concerning the mining industry in Australia and it's future for growth relevant to national property markets asking the specific question of "Will the resources sector continue to boom?" Article text:

Well, the experts certainly think so.  If you have any interest in the resources sector, arguably the best source for information is the Bureau of Resources and Energy Economics (BREE).  Their most recent forecast for the 2011/12 financial year is a 15% increase in the value of Australian energy minerals and metals over the previous year, bringing the total value to over $200 billion which is a record for export earnings.

The number and value of advanced resources projects is at an all time high with most of these projects located in Queensland (31) and Western Australia (40). Additionally there are a further 404 ‘less advanced’ projects that are either undergoing feasibility study, awaiting approval or awaiting final investment decisions.  These include 14 proposed LNG developments which have the potential to add 75 million tones to Australia’s annual LNG production capacity.  BREE also point out that there are 15 less advanced iron ore projects which have an estimated capital expenditure of $1 billion or more... Read Full Blog Article 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

Cairns Property Market Overview Presentation

Cairns property market overview recently presented by Rick Carr from Herron Todd White at to the Cairns Chamber of Commerce. Click video image above or 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

Steady Activity Expected in Local Property Markets

New figures released from Herron Todd White indicate that rents are likely to remain stable throughout the remainder of 2010.

Cairns overall rental vacancy rate now stands at 4.6%; about double that of a two years ago before the global financial crisis.

Also in HTW's CairnsWatch report, residential property sales were reported to have slowed as the last of the effects of government first home buyer grants wore off.

"While there is a lot more confidence in the market than what there was 18 months ago, the difference is that interest rates are now in a rising cycle,’’ he said.

"For this reason we expect the Cairns real estate market to only build slowly in activity during 2010.’’

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Claims of Australia's 'Housing Bubble' Rejected

RP Data's national research director Tim Lawless has rejected claims that the nation is experiencing a 'bubble' in property values.

“Across Australia’s capital cities, home values have increased by just 6.2 percent per annum over the last five years – a rate of growth that is in line with wages growth which has been 6.0 per cent per annum over the same time frame," Mr Lawless said.

“Rather than experience a rapid decline, my view is that home values will continue to show modest growth due to the ongoing under supply of dwellings and rapid population growth that creates demand for housing.”

Read full article