We're in the process of buying in Cairns and there are opportunities there, but I would hesitate to buy in the manner you're suggesting.
Cairns strikes me as fundamentally a low-income place. There's little industry other than tourism and services to people who live there, and those are low-skilled, low-paying occupations on the whole. There is relatively little big-city-style commerce to drive a professional workforce of any size (and a lot of the professionals came from elsewhere as a lifestyle change, and came with money to buy their homes). It's the equivalent of a one-company town in some ways.
This means there is a healthy market for cheap rentals that are easy travel to the CBD - the sorts of things rented by cashiers and secretaries and waiters. This is exactly what we're buying - a <$200K townhouse, small and tidy, the sort of thing that suits the needs of the working population. It won't get huge capital gains, but it will be positive from the outset and it should never be difficult to rent.
The more expensive end of the market is a different ballgame. This isn't a statistical perspective, but there just don't seem to be that many working people on good incomes up there. Not enough to give a critical mass of renters at that price point IMO.
In Cairns, you're basically selling a lifestyle. If it's expensive, it needs to be beach (and by that I mean a 5-10 minute walk). If it's not beach, it needs to be cheap and practical for people who work. I'm not sure that either of these "mindsets" will be met by what you have in mind, and I'm not really sure who would rent it. It sounds more like the lifestyle compromise you make to get your foot in the door to own your first home, but not necessarily to rent one from someone else.
There are some good pickups in Cairns, especially in the low cost apartment-and-townhouse bracket if you're a yield player more than a capital gains player, and as long as you do some good due diligence on the body corporate. We're buying there because it also serves a shorter-term need for us as well (it will be a PPOR for a while before we rent it), and what we're buying stacks up well enough for us in all its pros and cons.
But if I were looking to focus on any area in Australia without any personal drivers in play, I would probably pick somewhere else. And I would definitely not buy there with serious capital gain in mind. There just isn't enough of an economy to imbue the land with the kind of value needed to drive serious growth IMO. At the risk of starting a controversy, Australia has a lot of land, and most of it's worthless until you co-locate it with industry and opportunity. Industry and opportunity is what changes it from "plentiful" to "scarce."
Cairns strikes me as fundamentally a low-income place. There's little industry other than tourism and services to people who live there, and those are low-skilled, low-paying occupations on the whole. There is relatively little big-city-style commerce to drive a professional workforce of any size (and a lot of the professionals came from elsewhere as a lifestyle change, and came with money to buy their homes). It's the equivalent of a one-company town in some ways.
This means there is a healthy market for cheap rentals that are easy travel to the CBD - the sorts of things rented by cashiers and secretaries and waiters. This is exactly what we're buying - a <$200K townhouse, small and tidy, the sort of thing that suits the needs of the working population. It won't get huge capital gains, but it will be positive from the outset and it should never be difficult to rent.
The more expensive end of the market is a different ballgame. This isn't a statistical perspective, but there just don't seem to be that many working people on good incomes up there. Not enough to give a critical mass of renters at that price point IMO.
In Cairns, you're basically selling a lifestyle. If it's expensive, it needs to be beach (and by that I mean a 5-10 minute walk). If it's not beach, it needs to be cheap and practical for people who work. I'm not sure that either of these "mindsets" will be met by what you have in mind, and I'm not really sure who would rent it. It sounds more like the lifestyle compromise you make to get your foot in the door to own your first home, but not necessarily to rent one from someone else.
There are some good pickups in Cairns, especially in the low cost apartment-and-townhouse bracket if you're a yield player more than a capital gains player, and as long as you do some good due diligence on the body corporate. We're buying there because it also serves a shorter-term need for us as well (it will be a PPOR for a while before we rent it), and what we're buying stacks up well enough for us in all its pros and cons.
But if I were looking to focus on any area in Australia without any personal drivers in play, I would probably pick somewhere else. And I would definitely not buy there with serious capital gain in mind. There just isn't enough of an economy to imbue the land with the kind of value needed to drive serious growth IMO. At the risk of starting a controversy, Australia has a lot of land, and most of it's worthless until you co-locate it with industry and opportunity. Industry and opportunity is what changes it from "plentiful" to "scarce."
