Suburb spotlight: Cairns enjoying low vacancies
Located in the northern region of Queensland, Cairns is home to over 220,000 people. It is 1707 km northwest of Brisbane and is a popular tourist destination thanks to its tropical climate.
According to SQM Research director Louis Christopher, Cairns is enjoying a low vacancy rate of 1.9% at the moment, down from a peak of 4.9% in August 2009.
This has translated into a slight increase in asking rents. For the Cairns region, houses are seeing a median asking rent of $389 a week, while unit median asking rents are around $236 a week, according to Christopher.
He also noted that there has been a downturn in the Cairns market since 2009.
“Back then in 2009, the median unit price was $300,000. Now it's $236,000. The median price for houses back then $430,000, now it’s $389,000. Over past 12 months, the rate of the climb has slowed somewhat. Houses down 1% for last 12 months, units prices are totally unchanged. They have flatlined,” he said.
Looking at data for stock on market, Christopher said he has been seeing “elevated stock listings” in Cairns. At the moment, there are around 6000 properties on the market in the region. While there has been a slight decline in listings over the last four months, he notes that there is “nothing to suggest there's a new trend yet”.
As for the outlook for next year, Christopher thinks it is “neutral to being a buyer’s market”.
Australian Property Monitors’ senior economist Dr Andrew Wilson told Property Observer that the Cairns market is “showing signs of picking up”.
“It is tracking price growth in both the house and unit market, even though the median house prices are 5% below previous price peaks,” he said.
He notes that there are significant issues with the unit market with regard to “insurances and cost of body corporate fees”.
“This has had a significant impact on unit ownership, that’s why there hasn’t been a development in Cairns in years,” he said.
Dr Wilson notes that houses in the northern beach suburbs of Cairns have been doing well so far.
“The top growth suburbs at the moment are Kewarra Beach, there are quite a number of sales there. The six-month median is up by 7%, and the 12-month median is up by 16%,” he said.
Dr Wilson said other top-growth suburbs included Trinity Beach and Clifton Beach in the north. In southern Queensland, he noted that Bentley Park and Gordonvale were “doing quite well”.
“I think the Cairns market will get very close to its previous price peaks by the end of next year. It’s not just a question of lifestyle markets in Cairns. The state’s economic output has improved. And Cairns is a hub for agriculture tourism. Together with the dollar, these will activate the local economy,” he said.
He added that investor activity has picked up in Cairns, especially with buyers from China.
“Cairns is ticking all the boxes at the moment. I anticipate price growth from now till next year, of between 5 to 7%,” he said.
Powe Property owner Matt Powe, who has ten years’ experience in the Cairns property market, says Cairns has picked up in the last 12 to 18 months.
“It’s been a long time coming. Since 2008, it’s been a pretty tough place for the property market and such up till a year ago, when rental yields were pretty high and prices were quite low,” he said.
He added that the prospect of cash-flow positive properties was a huge factor for an increase in buyers in the area.
Powe added that buyer activity in Cairns is made up of both investors and owner-occupiers.
“Investors are still there, there are more people moving into Cairns now, or getting out of a tenancy to purchase a property,” he said.
He notes that the Northern Beaches may be of interest after the Queensland Government approved the first stage of plans for a casino in Yorkeys Knob. Traditionally popular suburbs such as Cairns North, Edge Hill, Whitfield and Parramatta Park should remain in demand, Powe said.
According to the latest RP Data report, the median house price in Yorkeys Knob is $310,000, down 13% on last year. The average discount required to sell a house is 7.9%, while private treaty sales average 110 days on market. The median asking rent for houses is $376 per week, while gross rental yield is 6.3%.
The median unit price in Yorkeys Knob is $197,000, up 2% on last year. The average discount required to sell a unit is 7%, while private treaty sales average 122 days on market. The median asking rent for units is $250 per week, while gross rental yield is 6.6%.
According to the latest RP Data report, the median house price in Cairns North is $381,000, up 3% on last year. The median asking rent for a house is $350 per week, while gross rental yield is 4.8%.
The median unit price in Cairns North is $215,000, up 5.9% on last year. The average discount required to sell a unit is 9.5%, while private treaty sales average 105 days on market. The median asking rent for a unit is $283 per week, while gross rental yield is 6.8%.
According to the latest RP Data report, the median house price in Edge Hill is $390,000, down 1.3% on last year. The average discount required to sell a house is 7.3%, while private treaty sales average 82 days on market. The median asking rent for a house is $390 per week, while gross rental yield is 5.2%.
The median unit price in Edge Hill is $152,000, up 1.3% on last year. The average discount required to sell a unit is 8%, while private treaty sales average 101 days on market. The median asking rent for a unit is $230 per week, while gross rental yield is 7.9%.
According to the latest RP Data report, the median house price in Whitfield is $450,000, up 7.8% on last year. The average discount required to sell a house is 7.4%, and private treaty sales average 91 days on market. The median asking rent for a house is $420 per week, while gross rental yield is 4.9%.
The median unit price in Whitfield is $248,000, down 1.8% on last year. The average discount required to sell a unit is 7.8%, while private treaty sales average 88 days on market. The median asking rent for a unit is $265 a week, while gross rental yield is 5.6%.
According to the latest RP Data report, the median house price in Parramatta Park is $342,500, down 16% on last year. The average discount required to sell a house is 6.6%, and private treaty sales average 96 days on market. The median asking rent for houses is $355 per week, and gross rental yield is 5.4%.
The median unit price in Parramatta Park is $215,000, up 10.5% on last year. The average discount required to sell a unit is 8.4%, while private treaty sales average 96 days on market. The median asking rent for units is $280 per week, while gross rental yield is 6.8%.