Cairns still attracting lifestyle buyers, as tide goes out on economic migration

Cairns is still attracting its fair share of lifestyle migrants, albeit at a slower rate than before, but the number of economic migrants has diminished, according to the October Month in Review report from Herron Todd White.

“People relocating to Cairns tend to fall into two classes – the lifestyle and the economic migrants,” the report says.

“With the slowdown in the Cairns economy, the economic migration component, consisting largely of young singles or young couples or young families moving to Cairns for employment reasons, has diminished,” the Cairns office of Herron Todd White says.

According to the report, recent lifestyle migrants are typically the “pre-retirement empty-nester demographic, looking for a nice place to live but with opportunities for full- or part-time work if required”.

“Indeed, cashed-up lifestyle migrants who have sold up in Sydney or Melbourne to move to Cairns are like gold in the current market environment.”

According to the Cairns office market observations, lifestyle migrants are demanding a variety of accommodation styles, “some buying up big as if expecting to be constantly descended upon by the friends and relatives they have left behind, while others are seeking well-located unit accommodation with good amenities”.

The northern beaches are often a preferred destination, the report says.

The latest report puts the Cairns residential property market at the bottom of the property cycle and says it is still “very much a buyer’s market”, with property demand from investors and first-home buyers weak and the market for low-end housing slow.

“Demand for better-quality houses and units in good locations remains solid, largely sustained on the basis of the trade-up buyer segment,” it says.

“There are two types of trade-up buyer: existing locals trading up (or down or sideways) in response to changing circumstances and/or preferences, and people relocating to Cairns.”

“Locals are also active in the trade-up market, but the catch with this segment is selling their existing home. We often hear of sales that fall through because buyers are unable to sell their existing house in the presently slow market environment.”

Two recent reports have highlighted the struggles facing the Cairns market.

The Moody’s mortgage delinquency report highlighted the tourist regions of far north Queensland, Sunshine Coast and Gold Coast as having performed very poorly over the June quarter, with delinquencies of 2.59%, 2.68%, and 3.11% respectively.

Similarly, the RP Data Equity Report says far north Queensland has recorded the greatest proportion of properties in a negative equity position, at 13.5% of all homes.