Investor market soft in Cairns' fringes: HTW
Queensland's Cairns was a rising market for houses while it was starting to recover for units, according to valuation firm Herron Todd White's property clock -- a simple broad brush means to suggest where property markets are and the direction they're headed to.
In Cairns, the outer or fringe areas essentially mean the Edmonton to Gordonvale corridor on the southern side of the city. The area is a significant growth node bearing much of the brunt of the current and future population expansion. Indeed, Edmonton and Gordonvale were both satellite sugar towns which are now being well and truly swallowed alive by the urban expansion of Cairns.
Housing development in the Edmonton to Gordonvale corridor is dominated by single dwellings located on 600 to 800 square metre allotments. There is precious little in the way of apartment developments. Most sales in the current market appear to be to intending owner-occupiers. The investor market is soft.
For investors, the most popular purchases are standard four-bedroom, two-bathroom new dwellings which typically sell around the $340,000 to $360,000 mark and typically rent in the $420 to $450 per week range. There are higher quality homes typically up to $450,000 in price, but at this level still only pull $420 to $450 per week in rent.
Our feedback is that 10 to 20-year-old three-bedroom, one-bathroom dwellings are harder to move in the current market, particularly in the $260,000 to $300,000 category. It may be these dwellings that are offering the better buying opportunities with these homes typically renting for $310 to $330 per week.
However, the key to buying an investment property in the Cairns housing market at present is to concentrate on the current rate of rental return, not on the prospect of future capital gain which may be some time coming.
Property Observer found a few recent sales in the range $260,000 to $400,000 in Cairns' fringes on www.realestate.com.au.
A four-bedroom house at 18 Novelli Street Edmonton Qld 4869 sold for $372,000.
A three-bedroom house with a double garage at 28 Buzacott Street Gordonvale Qld 4865 sold for $273,000.