The Cairns Weekend Post Articles

Get ready for the big rental squeeze...

Cairns will be on the brink of a rental crisis before the year is out if the city’s vacancy rate continues to tumble.

If investors do not flock back to Cairns in the next six months, agents say the tight rental market could force tenants to buy, which would push house prices up again.

Vacancy rates across the city’s rental houses and units continue to tighten.

The latest Herron Todd White Cairns Watch report found the April trend vacancy rate for houses had dropped to 2.4 per cent, while units recorded a trend vacancy rate of 3.9 per cent and the market overall 3.1 per cent.

Cairns Watch analyst Rick Carr said units were sitting above the “stress” level, but the availability of houses was tightening which could see a “blowout” in rental rates.

“We expect the rental market to keep tightening during 2011 due to ongoing population growth and the lack of new rental property construction,” Mr Carr said. “If the trend continues like it has in the past six months then by the end of the year it will be a tight rental market.’’

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Time now right for property market revival...

Though the rental housing squeeze is not all bad news. While it makes it hard for those looking to lease reasonably priced properties it will force many to bite the bullet and buy.

They have a good incentive to plunge into the property market too with the State Budget announcing a $140 million program with $10,000 grants for owner-occupiers buying properties for less than $600,000, aimed at stimulating building activity and supporting construction jobs.

The rental vacancy crisis will also push up prices which have been at rock bottom for a long time.

Now is the time for canny investors to return to the market and buy homes, apartments or units for rent, with good returns and good value, before any probable price rises later in the year as rental stocks dwindle and before any new housing construction begins.

The low vacancy rate also could provide the trigger for new residential developments if the banks are willing to lend and developers are willing to take the risk.

While the details of what projects will go ahead under the Cairns Regional Council’s $4 million infrastructure discount scheme have yet to be revealed, it is believed some will boost housing stocks.

The only bugbear is the massive hike in stamp duty announced in the Budget.

Stamp duty will result in the fee climbing from $3000 to $8325 for a $300,000 home.

The changes mean buyers will pay the same rate for their family home as they would for an investment property.

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Time for action to start on $428 million worth of projects in Cairns...

WORK on three of the Far North’s biggest and most controversial projects will start within 10 months as the State Government yesterday vowed to turn promises into action.

Two Cabinet ministers will base their offices in Cairns from June 27 as community anger rises over the lack of action on major government projects in the Far North.

Main Roads Minister Craig Wallace and Transport Minister Annastacia Palaszczuk will oversee the progress of two of the region’s biggest projects with the $150 million Ray Jones Drive upgrade and the $38 million Lake St and City Place overhaul.

The Weekend Post can reveal both projects are slated to be completed by 2013, with $41 million worth of work on Ray Jones Drive allocated for the first stage of the upgrade this year, creating hundreds of jobs over the next two years. The start of work on the key projects comes less than a year before the state election.

Meanwhile, Cairns Regional Council expects the first sod to be turned on the Cairns Entertainment Precinct after the 2012 wet season.

After another round of community consultation in July and a public exhibition period for two concept designs, a development application to start work on the project will be lodged.

Mr Wallace said the Bligh Government was fully aware of the Far North’s dire economic climate and denied the projects had been delayed.

“We’ve got our final two bidders on the design work for Ray Jones Drive, we’ll make a decision and announce the winning design in September, so work is expected to start prior to Christmas and finished by the end of 2013,” he said.

“This year we’ve allocated $41 million for the project and we’ve started relocating our Roadtek depot to Cairns.

“This road will cater for Cairns for the next 30 to 50 years so we’ve got to do this properly, and as the funds have come through from the Federal Government we’ve spent them.”
Homes may have to be resumed by the State Government in the second stage of the upgrade, Mr Wallace said.

Ms Palaszczuk said the first $12 million of the $38 million City Place package was included in
Tuesday’s State Budget for the next financial year to ensure the project could start as soon as possible.

“Work will include designing and constructing a pedestrian and cyclist friendly bus interchange, where buses can move through City Place, linking services north to south and vice versa, as well as bus layover facilities away from City Place,” she said.

A council spokesperson said the “architectural rainforest” concept design for the entertainment precinct had received almost unanimous support as the preferred option.

“After the July community consultations there will be an exhibition period for the two concept designs and information will be presented to the State Government with a full evaluation of each design option from a technical, operational and cost perspective,” the spokesperson said.

“After the exhibition period a development application will be lodged and preparation of detailed and final designs will begin.

“In order to acquit the $40 million Commonwealth grant within the stipulated timeframe, it is hoped that works on the project will begin after the wet season in 2012.”

Cairns Chamber of Commerce president Anthony Mirotsos said the community and business leaders must keep the pressure on to ensure the projects were delivered in promised timeframes.

“The southeast corner and Townsville have had their fair share of funding, but even though our economy is in a worse state than other areas we still haven’t had our fair share of investment,” he said.“

Articles published in The Cairns Weekend Post 18th June 2011

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

SIGNS OF RECOVERY FOR LOCAL CONSTRUCTION

A building industry leader believes the sector has turned the corner, despite the release of an unflattering first quarter report.

Master Builders Far North regional manager Ron Bannah said the industry’s outlook was looking better. “My feeling is that we are in a pretty good position,” he said.

Mr Bannah said the post-cyclone Yasi rebuilding process was starting to kick in and associated with the Cairns Regional Council’s $ 4 million infrastructure discount scheme there was cause for optimism.

The rebuilding program is expected to employ up to 1000 local builders and subcontractors and the discounts will fast-track 32 major construction projects over the next 12 months.

Mr Bannah said there were other good signs, including 70 building apprentices being re-employed over the past year. “Apprentices usually get the raw end of the stick and they are the first to be put off,” he said. “But to Constructions Skills Queensland’s credit and other people, 70 apprentices have been reengaged.”

Mr Bannah said entries for this year’s Housing and Construction Awards were more than last year’s. “When I went to Brisbane on May 9 for a meeting, there were only 48 entries but, as of last night, there are 90,” Mr Bannah said. “ That’s more than last year’s 77. I am quite surprised.”

He said, at one stage, there was the possibility the $100,000 awards night would be cancelled. “But not anymore. Ninety is great,” Mr Bannah said.

The Master Builders Survey of Industry Conditions report for the March quarter said the first three months had been another tough quarter for the state’s building industry, with flooding, cyclones and weaker demand impacting building activity levels. “The weather has, however, not been the sole challenge for the state’s construction industry during the March quarter,” it said.

“Financing issues including tighter lending criteria and higher than average mortgage rates have also weighed heavily on industry activity. Consumers and businesses, particularly those with no direct exposure to the mining boom, remain cautious about the economic outlook and hesitant to spend money unnecessarily in the short term.

Far North Queensland has been particularly hard hit by these trends and this has been compounded by the impact of the high Australian dollar on the tourism industry. A revival in the local construction industry is just what the region needs to help increase the employment rate and confidence in local housing markets.

Article published by The Cairns Post - 30th May 2011

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

CAIRNS POST: RENTALS LIFT FOR REGION

CAIRNS real estate agents hope the city’s rental vacancy rate will drop lower than 4.2 per cent in coming months pushing investors back into the property market as the region comes into its peak season.

Real Estate Institute of Queensland Cairns zone chairman Rick Szelpuk said rental vacancy figures for February were the lowest they had been in a long time after hovering between 5 to 6 per cent.

“Cairns is doing extremely well if you look at the February figures – they say houses in the Cairns central area, which includes Cairns North, Edge Hill and those suburbs, was at 3 per cent, at the northern beaches it was 2.5 per cent and the southern corridor was 3 per cent and if you put them all together there is an overall 2.8 per cent vacancy in the housing market.

“Units were slightly higher. In the Cairns central area the vacancy rate was 5.6 per cent, northern beaches 6.2 per cent and the southern corridor 2 per cent with an overall vacancy for units at 5.6 percent.

“Overall, that’s a 4.3 per cent rental vacancy rate for Cairns and that’s a pretty damn good
number considering what we’ve been through in recent times.

“As we head into our busiest period of the year, it’s a strong confidence booster as the vacancy rate can only go down and we should see investors going ahead and buying again.”

LJ Hooker Edge Hill associate director Amanda Boccalatte says houses have become more popular than units with people taking advantage of cheaper rents.

“Rent is certainly very affordable and many tenants have upgraded from a unit or townhouse to a house as they are getting more value for their money,” she said.

“One bedroom units aren’t as popular as they used too be because the prices have dropped, therefore, houses are more affordable.

“We only have 37 properties vacant and it’s the lowest it has dropped since January when we had 60 properties availableble so it’s a very positive sign.”

LJ Hooker Port Douglas director licensee Michael Samson said the seaside town had really felt the pinch in the global financial crisis.

“It’s getting better for us ass the wider area outside Port Douglas, which includess Mossman, has a vacancy rate of 10 to 13 per cent while Port Douglas is well under 10 per cent,” he said. “We’ve got people looking for houses so that’s a good sign for us. However, units aren’t as popular.”

Source: The Weekend Post 26th March 2011

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

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

THE AUSTRALIAN: CAIRNS ON THE COMEBACK

Writer for The Australian Terry Ryder reported today that Cairns looks ready to make a strong comeback in it's economy and property market.

Ryder notes major improvements to Cairns' airport and hospital, plans for the development of a $240 million dollar cultural precinct, major highway upgrades, large-scale mining related prospects and a rapidly increasing number of flights from fast growing international tourism markets.

The report comes as figures published recently indicate Cairns is one of Queensland's fastest-growing regions. Nearly 5,200 people moved to Cairns in the 2009 fiscal year, bringing its population to 164,356.

The 3.2 per cent growth put Cairns among the top four fastest-growing regions in the state, after Ipswich, Moreton Bay and the Fraser Coast.

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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