Cairns is heating up fast

Hi Everyone

Just popping in to let you know that Cairns is definitely heating up fast! Among other things, my observations are as follows:
  • the region is becoming more economically diverse - mining, tourism, tropical expertise, education, sport, science, asian food bowl, super-yachts, navy base
  • economic indicators are pointing in the right direction - increasing building approvals and business sentiment, decreasing unemployment.
  • the market is due for a growth spurt
  • stock on the market is limited
  • land availability is limited
  • rental vacancies are tight
  • population growth is strong
  • demand is outstripping supply
  • the Auction market is taking off
  • southern financial advisors are recommending the region
  • selling prices are at or above asking prices

On a personal note, I am currently at capacity, which is why I've not been active on the forum lately! :eek:
If you're looking for an investment in a less frenetic market, you might consider other areas closer to the bottom of the market.

Cheers

Jen
 
Paging Kesse in 3...2...1...

Somersoft's resident Cairns ramper!

:p

pinkboy

You called? :p

I do agree with Jen though. The sentiment on the ground is positive and the place seems to be buzzing (which seems odd if you know what the FNQ lifestyle is like!)

In my neck of the woods there doesn't seem to be too much stock on the market and what there is goes under contract fairly quickly.

Rental wise vacancies seem to be hovering around the 2% mark and yields are attractive too.


How was that Pinkboy? :D
 
Hi Everyone

Just popping in to let you know that Cairns is definitely heating up fast! Among other things, my observations are as follows:
  • the region is becoming more economically diverse - mining, tourism, tropical expertise, education, sport, science, asian food bowl, super-yachts, navy base
  • economic indicators are pointing in the right direction - increasing building approvals and business sentiment, decreasing unemployment.
  • the market is due for a growth spurt
  • stock on the market is limited
  • land availability is limited
  • rental vacancies are tight
  • population growth is strong
  • demand is outstripping supply
  • the Auction market is taking off
  • southern financial advisors are recommending the region
  • selling prices are at or above asking prices

On a personal note, I am currently at capacity, which is why I've not been active on the forum lately! :eek:
If you're looking for an investment in a less frenetic market, you might consider other areas closer to the bottom of the market.

Cheers

Jen

All major indicators point to the aussie$ continuing to slide against the US greenback. This will stimulate tourism, with cairns, Brisbane, and Sydney to benefit the most.
 
As a Cairns local I can agree that there is some improvement in the Cairns market but there are still a few factors that for me mean Cairns is off the table as a reasonable prospect of good buying at the moment:

*Exorbitant body corporate fees for units all over town
*An oversupply of units
*Uncertainty about whether Aquis will go ahead and too much emphasis on this as the solution to all the woes of the region
*High unemployment compared to the rest of the state


South East Qld looks a lot better than Cairns as Sydney starts to peter out.
 
As a Cairns local I can agree that there is some improvement in the Cairns market but there are still a few factors that for me mean Cairns is off the table as a reasonable prospect of good buying at the moment:

*Exorbitant body corporate fees for units all over town
*An oversupply of units
*Uncertainty about whether Aquis will go ahead and too much emphasis on this as the solution to all the woes of the region
*High unemployment compared to the rest of the state


South East Qld looks a lot better than Cairns as Sydney starts to peter out.

Whilst strata is high if you look around you can find places with ok rates. I bought a 2 bedda with $650 pq and $100k+ in the sinking fund. Some others I looked at were very high.
I cant see Aquis not happening. It is far too valuable to the local and state governments. To be honest it is far too valuable for anyone anyhwere to turn down. An $8b project with a 10 year construction phase in a large town with high youth unemplyment.
I think on a national level all the action seems geared toward tourism. They are literally building a 'casino corridor' down the east coast of australia with carins (new), brisbane (new), Sydney (new) and Melbourne. Once the dollar comes down long term in conjunction with chinese becoming the largest group of international travellers it is easy to see why.
 
I was at a conference yesterday with someone from Herron Todd White presenting on the local Cairns market. Overall, he said the market is fairly positive at the moment.

Some of the key points were there's an under supply of land at the moment.
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Unemployment isn't as bad as it seems. Cairns region is nearly on par with the rest of the state
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Rental Vacancies are pretty tight at the moment for houses and units
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Days and stock on market are getting less and less. One reason he said could be due to people waiting to sell but waiting for the market to rise further so there could be a bit of an influx of properties once it gets to the point where people are happy to sell.

There's no new high density dwellings being constructed at the moment nor has there been for 3 years. There's 42 DA's with no plans to proceed to construction.

Inner area of Cairns is slightly ahead of the Northern Beaches as far as growth goes. Some of the suburbs he said to take note of was Bayview Heights, Mooroobool, Freshwater, Westcourt, Kanimbla and Brinsmead.

He also said what's not hot is Goldsborough and further south around Mission Beach.

He thinks Aquis will be good for Cairns and supports it and if it doesn't go ahead there may be a minor depression but there's other economic drivers in the area so the market isn't solely dependent on Aquis so it should regain confidence fairly quickly.

That's all I can think of that he covered at the moment. If I think of anything else, I will add to it.
 
Damn! beat me to it! :( :D

:D:D:D

Bayview I am going to call the top of the heat and when its going to come. I pick the hottest time for Cairns being during January & Feb 2015, then March will still be hot, but see a gradual cool down towards mid next year.
 
:D:D:D

Bayview I am going to call the top of the heat and when its going to come. I pick the hottest time for Cairns being during January & Feb 2015, then March will still be hot, but see a gradual cool down towards mid next year.

Valentines Day is pretty hot and steamy up here! :D

pinkboy
 
I'm with Jen Jen.

It's just the vibe. No research from me. Lots more sold signs on the way to work. They're not lasting long. Few mates and neighbours selling quickly or above intended sale price. This wasn't happening 2 years ago.
 
I have been getting valuations lately for new loans and have noticed roughly 10 percent increase in the last 6 months but this is mostly on sub 300000 properties. And it doesn't look like it's slowing I purchased over 18 months ago though.
 
I was at a conference yesterday with someone from Herron Todd White presenting on the local Cairns market. Overall, he said the market is fairly positive at the moment.

Yes it is a little, but not really enough to get too excited about. We had spare capacity for a long time after the GFc and it has taken a while to fill and find its way to increased demand for new building but we have weak employment options and low wages, high holding costs so many constraints.

Some of the key points were there's an under supply of land at the moment.

Not really, have you seen Mt Peter masterplan? Room for 50.000

Unemployment isn't as bad as it seems. Cairns region is nearly on par with the rest of the state

It is bad. We now have structural unemployment. Unemployment rate looks better because people have simply given up looking so are not included in the unemployment numbers. We have had a steep decline in workforce participation. here is a good chart that illustrates it very well.

http://www.cairnsbiz.blogspot.com.au/2014/08/parsing-participation.html


Rental Vacancies are pretty tight at the moment for houses and units


About the same as it has been for ages. people do not really want to buy so you can get better rental returns as a trade off of not getting so much capital gains.

Days and stock on market are getting less and less. One reason he said could be due to people waiting to sell but waiting for the market to rise further so there could be a bit of an influx of properties once it gets to the point where people are happy to sell.

yes over time this risk reduces.

There's no new high density dwellings being constructed at the moment nor has there been for 3 years. There's 42 DA's with no plans to proceed to construction.

Insurance and body corporate are killers, one big issue holding back the property market and it is compulsory on units so they suffer more. Here is a chart from the government report that illustrates the issue. Scary for Cairns.

http://queenslandeconomywatch.com/2...-to-impede-development-of-northern-australia/

He thinks Aquis will be good for Cairns and supports it and if it doesn't go ahead there may be a minor depression

I doubt it will go ahead. Now Fung wants to wait until 2016 to try and get some funds from the stock market. He is clutching at straws. I am disturbed so many took the idea seriously without demanding to see professional analysis on the project.

Just today we had an article on how much lower wages are in Cairns.

http://www.cairnspost.com.au/news/c...-with-townsville/story-fnjpusyw-1227071134619

So we earn less and pay more in related costs. Rates are higher than other states and insurance is high, very high.

There is improvement, no doubt but coming from a low low base. I am angry at the hype, getting very angry about it, because the problems are in the too hard basket so those in a position of influence will just talk it up instead. I tried to join in debate but it was was vulgar with those with self interests abusing anyone that wants real reforms. That is all there is talk. Sydney is a lot of hot air as well but there is at least something of value in that city. JOBS.

So I would love to be positive and I would be if we could get real solutions to the insurance problem and vastly improved employment options. Otherwise some increases will occur but no more than any other regional town with issues. IMO DYOR
 
Could not agree more with the observations from Nelly. When you stop listening to those with vested interests and start looking at the cold hard facts Cairns has a long way to go. The signs are good and no doubt there is certainly an upswing happening but like most big regional centres, the upswing is slow, patchy and with some troughs in some areas. The insurance issue is a big factor in holding back the unit market and the LNP focus on Aquis being the saviour for the Cairns housing and employment market is not risky but downright dangerous. There is some good buying in some areas but at the moment it takes some meticulous research to do well.
 
Just spent a couple of weeks in cairns, cape trib, cooktown and now mission beach. Lovely part of the world. I really have NFI about the state of the market but did notice a few things:

- lots of comments about a lack of employment opportunities
- every second house is for sale in kurrimine (which could be a great buying opportunity for all I know although it looks like a holiday house market)
- there are lots of sugar cane paddocks around the traps which look perfect for subdivision, should market conditions warrant it. This type of thing has a tendency to limit an investor's upside but can be good for developers.
- When I spoke to the guy who took us out to the reef yesterday for some snorkelling, he said 8 years ago there were 80,000 charter visitors to the reef from mission beach every year. Now there are 4,000. I had him repeat the figures because I thought I misheard over the noise from the 600hp yanmar!
- Dunk island was a big part of this apparently, as well as the cyclone, gfc and rise in AUD
- AUD dropping should help the tourism stuff a bit.

Hope this helps!
 
- there are lots of sugar cane paddocks around the traps which look perfect for subdivision, should market conditions warrant it. This type of thing has a tendency to limit an investor's upside but can be good for developers.

This would be my major concern. There is definitely no shortage of land supply on the outskirts of the cairns area.
 
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