Cairns is heating up fast
- Thread starter JenJen
- Start date
What sort of yields can you expect in the lower to mid end (FHBer territory/working class areas) Jen? Non strata..
My main concern with QLD properties as always is the exorbitant rates/insurance, but if the yield can still push it to a neutral/slightly positive position all the better.
My main concern with QLD properties as always is the exorbitant rates/insurance, but if the yield can still push it to a neutral/slightly positive position all the better.
Really? Are you active in the property market right now? If so, what are your market observations? I'm not referring to economic sentiment here, but actual market observations. They are not the same. Plenty of other market commentators concur that it is heating up. Are they all 'spruiking'? From my point of view, your observations are more relevant to the market dated pre June 2013, which is about the time that Herron Todd White put it into recovery.
Also, this article in today's paper suggests that it's not just Yorkeys. Shameless spruiking of course! http://www.cairnspost.com.au/lifest...-surprising-rate/story-fnjuflgv-1227072002303
I have outlined what informs my observations on numerous occasions. What would you be looking for before agreeing that the market is heating up?
Cheers
Jen
I ignore what the Cairns Post has to say most of the time but particularly when they are discussing property. For the past 4 years they have had articles in their paper almost on a weekly basis saying the Cairns property market is heating up. In the pocket of the REIQ? Draw your own conclusion.
Yes I am in the market in Cairns, and importantly I live here. There are some other commentators talking Cairns up e.g Terry Ryder, however they are not so bullish as you, perhaps because they're not a buyers agent in FNQ.
Sure Cairns is improving but so is Gosford, Newcastle, Ballarat and Bendigo, Brisbane and the Gold Coast. Out of all these perhaps Cairns offers the best yield but it offers the least in capital growth and it is the latter that makes you wealthy.
And in answer to your question about what signs I would like to see to confirm a property market heating up, there's just one factor that stands head and shoulders above the rest:
Unemployment rate going down
Cairns has the highest rate of youth unemployment in the state (20.7%) and has one of the highest unemployment rates in the state generally although I'll concede this is going down.
It is also an area that tops welfare payments. There's a long way to go before anyone can confidently say the Cairns property market is doing anymore than slowly improving.
Yes I am in the market in Cairns, and importantly I live here. There are some other commentators talking Cairns up e.g Terry Ryder, however they are not so bullish as you, perhaps because they're not a buyers agent in FNQ.
Sure Cairns is improving but so is Gosford, Newcastle, Ballarat and Bendigo, Brisbane and the Gold Coast. Out of all these perhaps Cairns offers the best yield but it offers the least in capital growth and it is the latter that makes you wealthy.
And in answer to your question about what signs I would like to see to confirm a property market heating up, there's just one factor that stands head and shoulders above the rest:
Unemployment rate going down
Cairns has the highest rate of youth unemployment in the state (20.7%) and has one of the highest unemployment rates in the state generally although I'll concede this is going down.
It is also an area that tops welfare payments. There's a long way to go before anyone can confidently say the Cairns property market is doing anymore than slowly improving.
Doozer, can I please borrow your magic looking glass? That's something we can all definitely benefit from.
Cheers
Jen
O.k, Doozer, this is a different topic, so may be better suited elsewhere, but let's talk about it. Is it your understanding that unemployment is a lead or lag indicator of the property market? I'm not an economist, so I wouldn't be confident calling it either way. From a quick scan, though, I have come across articles that suggest the following:
a. Unemployment may well 'lag' the property market: http://www.macrobusiness.com.au/2011/08/unemployment-and-house-prices-revisited/
b. The historical relationship between unemployment and the property market is not necessarily representative of the future relationship: http://www.propertyobserver.com.au/...ing-and-so-is-unemployment-thats-a-first.html
Also, my understanding is that the property market is driven by a range of factors. For example, prohibitive prices/values in other areas such as Sydney, Melbourne and WA create a flow of interest to more affordable areas, which is what I am seeing. Investors in these areas are chasing affordability, reasonable yields and growth potential, and homebuyers and retirees are cashing in and selling up so they can relocate and be mortgage free. In my view, these things are not necessarily or entirely dependent on the unemployment rate decreasing first. Incidentally, the information provided earlier in this thread does touch on the unemployment trend in the region which looks like it is decreasing anyway.
Cheers
Jen
JenJen, I'm not getting into an economic debate or analysis. We happen to disagree on the current property market movements in Cairns. Several users have commented on this thread regarding vested interests. Why did you start this thread and the other similar one you have on this forum? Was it to share information or to drum up business?
There are several professionals on this forum who work in various areas of property. Most of them contribute without feeling the need to spruik their businesses or markets they work in. Rather they offer their knowledge for nothing.
Regardless, everyone on here should respect each others opinion and if happens to be at odds with your business objectives ie to obtain clients who wish to buy in FNQ then its too bad. Somersoft forums are the premier forums for investor education and it should not in any circumstances be used to market someones business, overtly or covertly.
There are several professionals on this forum who work in various areas of property. Most of them contribute without feeling the need to spruik their businesses or markets they work in. Rather they offer their knowledge for nothing.
Regardless, everyone on here should respect each others opinion and if happens to be at odds with your business objectives ie to obtain clients who wish to buy in FNQ then its too bad. Somersoft forums are the premier forums for investor education and it should not in any circumstances be used to market someones business, overtly or covertly.
Doozer, most contributors back up their opinions with at least some evidence, which you seem to be avoiding. Your assumptions about my business objectives couldn't be further from the truth. For your reference, I don't feel a need to 'drum up business', as you assert. If I needed to do that I would be advertising, which I'm not. Also, if Somersoft forums are the 'premier forums for investor education' how exactly are you contributing if you are not prepared to enter a debate or contribute any knowledge?
Cheers
Jen
This is the REIQ perspective on the Cairns market, albeit a month old.
http://www.cairnspost.com.au/lifest...market-on-the-up/story-fnjuflgv-1227027781510
Cheers
Jen
http://www.cairnspost.com.au/lifest...market-on-the-up/story-fnjuflgv-1227027781510
Cheers
Jen
How are you not advertising, any business on here with a sig/link is advertising?
Jen not advocating anything. I post from my personal experience and knowledge. FNQ is your area of expertise I expect it to be what you have a lot to talk about
But you can't say you're not advertising if you have you BA info in your sig. It's allowed so no issue, you're not doing anything that hasn't or isn't being done by others.
But you can't say you're not advertising if you have you BA info in your sig. It's allowed so no issue, you're not doing anything that hasn't or isn't being done by others.
Hi CJay
Yes, I can understand steering clear of Strata as the insurance market is not good at the moment, especially with pre 1985 buildings. Things are changing slowly though, with some insurance brokers prepared to charge a flat fee rather than commission, which is better. You might be interested in checking this out: http://www.lookupstrata.com.au/event/archers-seminar-future-regional-insurance-cairns/.
The housing insurance market is a different story. It has been changing over the past year, and much better than what is perceived. Generally you are looking at around $2K for an average 4 bedder, if you shop around. Obviously this depends on age of property etc. It?s lower if it's a new build, to updated building standards, includes security, and is not in the flood zone. Rates are high though, and depend on land content and purpose, but in my experience are generally around $3,500pa.
The attached was accessed via realestate.com.au on 30/09/2014. It?s just one example of average raw yield in a suburb, which I am not necessarily advocating. Based on the above, you would need to do better than the average to get into neutral territory, or rely on depreciation or after tax cash flow.
View attachment Woree.pdf
Cheers
Jen
To get things back on track a bit....
You'd be looking around the 5-7% for a stock standard purchase but ~8% isn't unachievable either.
Insurance is higher than other states which can be (but not always) a deal breaker if you're looking for something in CF+ territory . For my PPOR in the red flood zone with max no claim discount and also multi-policy discount my annual premium is about $2600 with RACQ.
I just did a dummy quote for a house in Brinsmead and also in Earlville and got a similar price where it was $2300p/a but that's with no discounts.
I don't find the land / water rates to be any worse than the other states I hold or have held properties in. Stamp duty is a bit cheaper than the southern states too.
Here's Herron Todd White's latest CairnsWatch report hot off the press, with a bit of Cairns property market 'spruiking' of course. The Cairns market appears to be moving regardless of investor activity.
http://www.cairnswatch.com.au/uploads/uploads/201409fullreport.pdf
Cheers
Jen
http://www.cairnswatch.com.au/uploads/uploads/201409fullreport.pdf
Cheers
Jen
