Cairns, House and land.

Hi all,

First time poster long time stalker of these forums. I have enjoyed reading all of your posts and have found this forum to be a great source for motivation and information.

Any how cutting to the chase my partner and I are flying up to Cairns next week on Friday to check out the place and potentially purchase our second IP. Where we will be looking will be in the North Point, Mountain view and Half Moon Bay estates primarily for a house and land package. I am hoping any locals of Cairns out there might be able to provide me with their thoughts on these particular areas and if possible what they think of Kenfrost homes the company undertaking these developments.

As this will be our first time visiting Cairns does anyone else have any further recommendations for areas we should visit to get a feel for what is happening up there?

Thanks in advance for any help.
 
Hi all,

First time poster long time stalker of these forums. I have enjoyed reading all of your posts and have found this forum to be a great source for motivation and information.

Any how cutting to the chase my partner and I are flying up to Cairns next week on Friday to check out the place and potentially purchase our second IP. Where we will be looking will be in the North Point, Mountain view and Half Moon Bay estates primarily for a house and land package. I am hoping any locals of Cairns out there might be able to provide me with their thoughts on these particular areas and if possible what they think of Kenfrost homes the company undertaking these developments.

As this will be our first time visiting Cairns does anyone else have any further recommendations for areas we should visit to get a feel for what is happening up there?

Thanks in advance for any help.

Why house and land?

It breaks all the fundamental rules of property investing

Scarcity - no
Land appreciates - you only hAve a small block
Buildings depreciate - 2/3 of your purchase price is paying for the dwelling , it should be the opposite
Location - nope
 
You're from Adelaide, a lot of good deals there. What is the attraction to Cairns? I looked there about 10 years ago and didn't like it tbh. Prices have gone no where in that time and place gets smashed by a cyclone every second year. Winning!
 
Mountain View Estate is a long way out by Cairns standards as it is past most of Edmonton, there are thousands of houses planned for this area so I would avoid it. Half Moon Bay is close to beach front so insurance premiums might be interesting, see if you can get a reasonable quote, I don't know what the H&L prices are here but I would assume its the most expensive of the three. North point is opposite Smithfield shopping centre, is there any reason you are looking for a new property? Construction costs are high in Cairns and it is possible to buy better if you look for established houses in good areas.
Avoid the immediate CBD area for houses as these are generally HC areas or areas with a low standard of housing. The exception to this is Edgehill and Witfield.
Are you looking for a future ppor? If so there is plenty of value as prices have increased but they are still only slightly above their post GFC lows. The market and local economy is on the improve but its starting from a low base, the economy is based on tourism but its supported by education, health, sugar cane, construction, the naval base and Australia's 5th or 6th busiest airport. The city is a service centre for PNG, Cape york and there are about 3000 fifo workers living there.
The question is why not buy again in Adelaide? The entry prices are low, yields are high, holding costs are lower and the city is more diverse. Thats what I'm looking at presently.
 
Some good advice. The problem cold be over supply. They have approved Mt Peter massive housing development for 50,000 people. Old drive in site at Woree has been about to start for years. In the CBD there has been approval for 12 towers. So the scarcity angle is one to be informed about. However they never seem to get started on. Cairns is a place where there is something always about to happen but never does.

Northern beaches does not have major developments planned so could do better as some desire to live north but insurance must be taken into account. So much of it is a floodplain and of course coastal surges and erosion on the beaches. North point looks uninviting with no trees yet, houses on top of each other. the tip about existing housing could be a good one though not too old as the more recent ones are rated cat 5 proof.. Try for slight elevation at least and get an insurance quote before

It is a great place, just poor planning.Now some in leadership are trying to push for a new housing estate in East Trinity. Not the smartest of places.!
 
I forgot there is something happening and that is the start of direct flights from Singapore. I think they will try to sell off the plan to investors in Singapore. I really do not know if this will be a good or a bad thing. There is only one flight in per week to start and two out. People that understand Darwin market might know better what attracts Singaporean investment as they already have dirct flights.
 
Hi all thanks for the responses.

First off why not purchase in Adelaide again? Well I have lived here now for the past 6 years and and In my opinion I really see very little movement and growth in the market. I agree it is a low price buy in point and yields out north can be fairly good but for me Adelaide is just not the place I wish to invest my money in at this time. This is not to say that there are no good investment opportunities around in Adelaide undoubtedly there will be, but not for me this time around.

I believe that Cairns offers better investment opportunities then Adelaide. Increased job numbers, decreased unemployment, vacancy rates of under 2.5%, an aussie dollar that should continue to decrease driving tourism in the region. These are some of the reasons I am looking at the Cairns region.

As for the reasoning going for a House and land I like the idea of paying less stamp duty then an established house, achieving maximum depreciation, higher tenant appeal leading to higher rental income potentially, reduced maintenance costs compared to an older established home. I understand that there may be a smaller land component compared to an established home and this is something I have taken into consideration. In saying this if I could find an established home that ticked all the boxes then sure I would go for it.

The purchase will be purely for investment reasons and will not be for a PPOR in the future.

The search continues and hopefully once we get up there to Cairns we gain a better appreciation for the area.

Cheers.
 
I spend a portion of my time in Singapore and has not seen anything from cairns being advertised here.

I my opinion, even if anything from Cairns is to be marketed here, it will not arouse much interests. Reason is Cairns is not a big place. Singaporeans, if they buy in Australia, will choose big cities like Sydney or Melbourne, not Cairns. They have too much choices. Not to forget, Australian properties have to compete with Malaysian, Philippines, USA, UK properties to sell in Singapore. What chance do Cairns properties stand here?
 
I would avoid anything south of the city as there's too much land to be developed and with Mt Peters that will certainly keep the supply happening for the medium - long term. I climbed Walsh's Pyramid on the weekend and looking down on the area realised how much land there really is to be developed. A lot of it is cane farms at the moment where eventually some of the farmers will sell to developers.

North of the CBD you have mountains and the ocean so there is still land to be developed but the supply is a lot more limited as there's not a lot of places you can go. Council have put restrictions on building on the mountains too as you can no longer build more than 100m up.

I live (and my office) is in Trinity Park and have been watching the houses be built near Half Moon Bay (which no-one used to know about....). The estate has NBN and being right near the beach is a lifestyle draw card too. Should the owner of the block of land on the other side of Reed Rd sell or develop then that will be a bit of a short-med term game changer. At the moment there's some issues with campers (squatters) using that land and the beachfront as a free camping ground and because there's no facilities there, and well, you can imagine what they're doing there....

Elysian estate is worth looking at too as there's some decent sized blocks of land there which are up the side of Earl Hill but the building parcel is a bit small, and being a new estate there's some covenants to be aware of, but nothing really outrageous. Keep going to the end of Roberts Drive and there's some new land there too which is being built out quickly.

North Point has that mass developed cookie cutter estate feel about it, but then again, some people like that. It's close to Smithfield shopping centre and entry point is reasonable.

As mentioned, go to the council website and look at the flood maps. I am in a red flood zone and insurance premiums were almost a deal breaker for me. When I first started to look I wasn't able to find a premium for under $10kp/a that had flood cover. I am now with RACQ where my premium is ~$2.5kp/a with flood cover.

I would also look in already developed areas for newer established houses.

As far as stamp duty goes there is a concession if you're purchasing as your own home vs as if it were for an investment. But, if you're looking at saving some stamp duty on a build then (from what I understand) the land has to settle first and then built on so it has to be 2 separate transactions and not a house and land package. The holding costs during the build would soon erode away that original saving in stamp duty.
 
Nice summary of the northside from Kinnon, I can add that most of the cane fields north of the airport on either side of the Cook hwy are flood plains. It's an impressive sight when the Barron properly floods, most of this land will never or should never be built on for residential purposes. This does limit usable land north of the city between the mountains and sea unlike the south side.
 
One thing I forgot to mention is Cairns market is a little unique when it comes to land as there is currently more demand for vacant land than what is being supplied which isn't usually the norm.

There's a small subdivision in progress in Bluewater estate right near where the new tavern is being built and stage 1 which was the wet blocks sold quickly and the dry blocks which have not long been on the market are slowly selling too which I find a bit surprising due to the proximity to the tavern (but Bluewater is where all the cool kids live ;)).

Actually, the tavern, Bluewater Bar & Grill, which is opening this Friday is creating a lot of buzz in the local community too. I wasn't too sure how well it would go as it sticks out like a sore thumb where Trinity Park is more of a residential suburb and not commercialised or touristy but, as mentioned, everyone seems to be going nuts over it. Be interesting to watch once the novelty wears off.
 
House for sale

I'm selling 4 bed 2 bath IP Daphne Drive Redlynch Rise ( just above village) great spot Ive had it on gumtree for 3 days but will list with agent soon. Has tenant insitu lease expires in August. Rental history available. Contact me for details.
 
Terrible investment place. But could be contrarian theory.

My relative bought 2 houses there for $500-600k 4-5 years ago. They're worth $350-450k today
 
According to the ABS there are currently 108,500 people employed in the region.

Not looking to start any arguments. That's what makes a market when people have counter ideas.
I go to Cairns every year, I love the place for a holiday.

ABS is more regional, Cairns as you would know covers a huge area. So your best looking in more depth at localised employment figures. Check with Cairns Council online. Here you go: http://economy.id.com.au/cairns/local-jobs
 
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