2010 Predictions for Cairns

[zenq]

Re: Real estate agents: the agents I've spoken to said they have been in a mini-boom lately. While employment is low, and some major companies have gone under, many people are doing fine. My business had a minor downturn but prospects look guarded but good.
I'd like to sell a development property at present but market is definitely flat in that sector.
Cairns is a lovely spot but does have some downsides.
While climate change would have some negative impact, our huge rainfall is likely to become an enormous appeal if droughts, water restrictions etc worsen.

 

[chanos]

Cairns

Long term I would be concerned about Cairns due to the reef dying.
It has already suffered degradation. Without the reef there are not huge reasons to go there (as you know because in the GFC noone had money for holidays and not many people went there).

Cairns is also hot now and will be even hotter with global warming. I think it is too hot to be a lifestyle choice for too many people. The gold coast or sunshine coast is more of a lifestyle choice as not as extreme heat.

So in the long term my advice is get your money out and put it in brisbane, melbourne, perth or even darwin.

Or even townsville is better even though townsville is uglier because townsville has lots of military and mining.

Darwin and Townsville are both hotter and drier than Cairns. Just spent 22 tears up North (Darwin) and Cairns is a far better lifestyle choice. Darwin is chockers full of Military and lots of mining. And the reef is not dying.
Reckon you have no idea Gato with statements like that. However, I do have IP's in both Darwin and the sunny coast and do agree they are good spots.

 

[Sunfish]

And the reef is not dying.

Wanna bet? I first observed the reef 60 years ago. It appears to be in terminal decline to me because it has never recovered from the first, severe, crown of thorns infestation. Was that in the 70s?

 

[Young Gun]

I agree that the reef is in stages of decline. The crown of thorns are still there, but more is done to prevent an outbreak similar to the 70s. Coral bleaching is also a problem. I've seen some of the damage after cyclones at places where I've dived. All the same, the coral spawning happens every year, so I don't think the Great Barrier Reef will disappear, or even lose the ability to impress in our lifetimes.

Like others, I was a little pessimistic about the Cairns economy for a while, but decided I'll save it for when the mining boom finishes.

 

[Toon]

A story in The Australian today about the Barrier Reef:
http://www.theaustralian.com.au/news/nation/scientists-crying-wolf-over-coral/story-e6frg6nf-1225811910634

 

[sailor]

A story in The Australian today about the Barrier Reef:
http://www.theaustralian.com.au/new...-wolf-over-coral/story-e6frg6nf-1225811910634

It's like any scientific study -- there's data to support and data to deny.

 

[Gatoblanco]

Darwin and Townsville are both hotter and drier than Cairns. Just spent 22 tears up North (Darwin) and Cairns is a far better lifestyle choice. Darwin is chockers full of Military and lots of mining. And the reef is not dying.
Reckon you have no idea Gato with statements like that. However, I do have IP's in both Darwin and the sunny coast and do agree they are good spots.

Chaos I do have an idea.
I have lived in Darwin twice and Cairns for nearly two years. I owned an IP in Cairns and I renovated it.

I dont mind if people think I am correct or not however I am offering my advice which sailor may or may not choose to take.
If i was sailor I would incur the transaction costs and get my capital out. In the long run BNE has always done better than Cairns. Go check some stats. API is one source of 10yr stats. Now with the reef issues that CG differential in the future will be even more. So that would compensate for transaction costs.

As for the dying reef. I mentioned that on this forum probably 2yrs ago. Since then there has been more and more stories about it each worse than the other have a look at this saturdays courier mail for another story about reef dying.

I agree with you that Cairns is prettier than Darwin or Tville. much prettier. Greener and made a bit nicer for the tourists (i.e. city in a garden strategy Cairns Shire Council). However go and have a yarn to someone in Coolangatta or someone in Caloundra and ask them if they want to move to Cairns. NO WAY.

Really hot.
Beaches are not pretty and you need stinger protection anyway.
Loads of social problems. Big social problems. There are whole ghettos in Cairns not including longrasses from the Cape. (You would be experiencing that in Darwin right now even worse).
Far away from Brisbane and services.

For some people Cairns is a lifestyle choice but not to the same extent as better climates.

So good luck to anyone who invests there. I personally would not recommend it. I was lucky to sell at the peak.

 

[Young Gun]

I was just wondering if anyone has been considering Innisfail. Or actually purchased in that area.

Regarding where people want to live, I guess you could ask people in Cairns if they want to move to Coolangatta...

 

[eternit]

Hi Guys,

What are your thoughts on the Cairns property market now? Do you think its getting any better? Are there more jobs there now? Are people moving to Cairns?

Thanks.

 

[jerky]

Yeah, Im also interested to know about Cairns atm. It was rumored that Jetstar were bringing on more flights in April or something like that, that was going to impact the tourism industry in a positive way. I am holding off selling my studio unit for some good news up there

 

[Young Gun]

Jetstar flights between Osaka and Cairns start from today. I didn't hear of any forecasts other than to say up to 1200 visitors a week can be expected. A local councillor is trying to build a water park north of the city near Smithfield. There are plans for a major theme park somewhere south of the city. Main roads are planning to widen the southern access along the Bruce Highway, either before or after they upgrade the Kuranda Range Road.

Lots of things are happening in Cairns, but I don't think it will have quite the same effect as past booms. I visited the Gold Coast last January and it definitely looked a lot busier there than in Cairns. But regarding Japanese tourism, I think both places are similarly affected by the drop in numbers.

I don't think the population hasn't changed significantly. Recently Bligh (premier) said Queensland needs a second capital city to alleviate overcrowding in the south-east. Possibly Townsville, so could inflame Cairns-Townsville rivalrys.

Regarding prices, I think they seem fairly stable at the moment. REIQ report increases in median prices in particular suburbs but I think it can be related to type of houses are sold in that suburb. I went to the Public Trustee auctions for 3 houses in Cairns (2 in Edge Hill and 1 in Manoora). One sold just over reserve, the other two were passed in.

Anyway, just waiting for the weather to clear so I can use my Reef Pass (unlimited trips to the reef on Ocean Spirit for a year).

Not sure if any of this helps, but best of luck.

 

[chrispy]

The rental situation has definitely improved. My short term tenants stayed 7 months and moved out last week. The townhouse is already re-let, albeit at the lower rent, but there were a number of prospective tenants, so maybe its Cairns turn to start shining again.

Chris

 

[eKwatee]

Is there anything in Cairns representing good value that would make a good buy in todays current conditions?

 

[pango]

Im seeing very good buyers value here ATM.

I have pondered over my next IP purchase and as I live in Cairns, I am perplexed as to when the correction will come here. The northern beaches are seeing elevated buyer interest, with properties moving at long last.

This has not really translated into higher returns for vendors, but certainly better yields for investors in the higher end properties.

As an example, if you look at the replacement cost of the higher end stock, it is clear that most properties are selling 1-200k below what it would cost to build them. Good land close to the beach would be around the 300k plus for 800sqm. If you apply the standard build cost of a 350sqm home with a pool, this would set you back around 800k when finished, yet no one is getting that.

That would tell me that when things do correct and reflect replacement cost, there could be some solid CG to be made, the question is when that will happen. I have seen zero growth here myself in the last 3 years, but I know that things will inevitably improve and it will have been worth the hold costs etc.

I attended a council presentation for the proposed Performing Arts centre and Museum development during the week. They say it is estimated that we will see growth of around 70 000 people over the next 3-4 years with tree and sea changers realizing the value up here and making the move. This should reflect in property prices at some stage, but again "when" is the question??

If I had a lazy 6-700k burning a hole in my pocket right now, I would probably still head to Brisbane or the gold/sunshine coast with it as I expect the returns would be slower but more certain.
This is a speculators market up here right now.

If you've got the risk gene burning away however, I think Cairns is a good place for you given what might eventuate.

Personally, I have done well buying into places that present this type of potential, it just might take a while to get the return you want.

Cheers
Pango.

Pango.

 

[Young Gun]

I agree with the above comments expecially re capital growth. Someone told me recently prices would double in 10 years. Perhaps I should have asked... from when?

There are some properties which could be cash flow positive. Take a look at Parramatta Park units. Also studio units in the M suburbs. One was very recently advertised for 60K - urgent sale. House in Parramatta Park recently listed for less than 300K but seems to have been sold. Renovator specials in various suburbs occasionally pop up too.

I was driving to Mossman Gorge a month ago and noticed a sign at the Cooya Beach turn-off advertising blocks of land for 90-odd thousand dollars. I just tried looking on the net, but couldn't find anything.

I also noticed Hotspotting no longer has a location report for Cairns, the closest I think was Charters Towers. I guess this could mean that Cairns is off a lot of people's radar at the moment.

 

[Nathan]

I have been buying here this year, see it as good value.

Not everyone has same viewpoint as myself.... However I recon it is undervalue, do your own research however.

 

[ozharp]

A buyers agent was trying to get me to buy an apartment in a new complex in Cairns about 5 years ago for the full price that the builder was asking, $220k. I made a few phone calls to local real estate agents to learn that other apartments in the complex were being sold by owners off-loading them for around $170k. Buying an apartment at $50k more than what identical apartments in the same complex were selling for wasn't very appealing to me so I declined. Looks like I definitely made the right decision, and there's a lot to be said for doing your own research rather than relying solely on the advice of an 'expert'. Golden rule: buy below value, not $50k above!

 

[Andrew_A]

A buyers agent was trying to get me to buy an apartment in a new complex in Cairns about 5 years ago for the full price that the builder was asking, $220k. I made a few phone calls to local real estate agents to learn that other apartments in the complex were being sold by owners off-loading them for around $170k. Buying an apartment at $50k more than what identical apartments in the same complex were selling for wasn't very appealing to me so I declined. Looks like I definitely made the right decision, and there's a lot to be said for doing your own research rather than relying solely on the advice of an 'expert'. Golden rule: buy below value, not $50k above!

Sounds like you were almost bitten by a marketeer rather than helped by a buyers agent, of course a shark will not tell you what they really are but pretend they are actually a dolphin!

 

[Young Gun]

Hi Nathan,

Would you care to share a little information on your property purchase in Cairns? I had a quick look at your web-site - looks very good.

 

[Nathan]

I made a post about the recent one previously will pm a link.