Cairns

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The news that construction of a new irrigation dam near Cairns appears unlikely in the foreseeable future is cause for some concern, particularly given the high number of recent avocado and citrus tree plantings in the Mareeba and Dimbulah Irrigation Area, according to the latest rural report from valuation firm Herron Todd White.
This has impacted values in the region.
“The threat of drought, reduced irrigation water allocations, and the continued popularity of the avocado has led to change in northern horticultural industries,” the firm said.
"Fear of a repeat of the 2016/17 drought is never too far away from the minds of irrigators in Mareeba and the Atherton Tablelands."
Growers have adapted to water security concerns by constructing dams that utilise existing overland runoff and recycled irrigation water that would normally go to waste.
The benefit of these on farm dams is that they are not regulated by Sunwater, therefore the water is free from regulatory charges and the danger of reduced allocations.
To improve the efficiency of these dams, growers are also upgrading their pumping infrastructure with variable speed drives which have resulted in significant savings on their electricity bills.
The report also found that composting has emerged as a major new industry in the horticultural area in far north Queensland.
A large composting facility known as Shark Recyclers has been constructed in Biboohra, north of Mareeba.
It is reported to be a next-generation facility that is the largest licensed compost and soil conditioning manufacturing facility in Queensland.
This has helped growers in far north Queensland to expand into the profitable avocado sector. The recent sale of a mixed avocado and sugar cane property in the Mareeba district for nearly $60 million demonstrates the changing market.
Many growers have successfully transitioned from traditional mango and other tropical fruit crops to Shepard and Hass avocadoes, chasing the insatiable consumer demand for avocadoes.
Fruit prices in recent seasons have been very profitable with sales of going concern avocado farms very rare as growers have tended to hold on to these assets to take advantage of super profits.
Nearly 50,000 trees have been planted in recent years in the Mareeba and Atherton districts as growers look to cash in on continued high prices.
The full “Month-in-Review” Herron Todd White report for April 2020 can be found <a href="https://static.htw.com.au/HTW-month-in-review-April-2020-Rural.pdf" target="_blank">here.</a>
Note regarding COVID-19
This edition of Month In Review had its topic defined in late February with submissions from our offices collated through to late March. During this period, shifts in the social and economic landscape due to COVID-19 became increasingly dramatic, as demonstrated by the varied information provided by offices over the course of three weeks.
This month’s residential theme on baseline property market drivers remains a common thread, and provides an indication of what influences to monitor as the property sector recovers post-crisis.
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Cairns region home to both optimism and concern; HTW rural 

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The Cairns economy and residential property market continue to plod along, according to a recent Herron Todd White (HTW) residential report. 
The valuation firm asked their valuers to give an educated outlook on the residential market in their service areas.
"Our best guess is that 2020 will look a lot like 2019 (which looked a lot like 2018)," the valuation firm said. 
The report notes the $176 million redevelopment of the Cairns Convention Centre is due to commence in June 2020. With Riley, Bailey and Flynn (the Crystalbrook Collection Hotels) being finished, the first half of 2020 will lack a large construction project and the lack of activity may extend the normally quiet summer period further into 2020.
The changes to GST charges on foreign-flagged superyacht charters and predictions of a surge in superyachts visiting for leisure and maintenance is a real positive for Cairns and is exactly the type of stimulus needed to support the local property market.
2020 is an election year with council elections due on Saturday, 28 March 2020 and state government elections due on Saturday, 31 October 2020.
"Unfortunately the uncertainty elections cause tends to have a negative impact on market activity with people delaying decisions until after the dust has settled," the valuation firm said.
"If we had to have a wager on where the residential market would be in December 2020 our bet would be the same or slightly less sales than 2019 and median prices similar to or slightly below 2019." 
A two bedroom apartment in Cairns CBD has recently been sold for $232,000.
Located at <a href="https://www.realestate.com.au/sold/property-apartment-qld-cairns+city-132182730" target="_blank">2/157 Grafton Street </a>(pictured below), the apartment comes with open plan living and dining, kitchen, balcony and two bedrooms upstairs.
The property last sold for $320,000 in 2005. 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/9/cairns%20city.jpg" alt="">
 
A current listing is a two bedroom apartment in Cairns City with uninterrupted views. 
The apartment at<a href="https://www.realestate.com.au/property-unit-qld-cairns+city-132927182" target="_blank"> 3/138 Abbott Street </a>(pictured below) has been listed for sale with a price of over $400,000.
It comes with designer kitchen, open plan living, front patio and undercover parking.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/9/carins%202.jpg" alt="">
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Cairns property market to continue to plod in 2020: HTW residential 

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The Cairns retail property market passed through the bottom of the cycle during the course of 2014, but the limited recovery thus far means that the retail property market remains relatively flat, according to the latest report from valuation firm Herron Todd White.
“It must be also said that retail property sales in Cairns are extremely sporadic, with most sales involving mixed use retail and office buildings or tenant buyouts of single premises,” the March report found.
The level of general commercial property sales in Cairns, inclusive of retail and commercial office premises, highlights that activity in the Cairns commercial market remains well below the pre GFC levels.
Sales volumes have been gradually rebuilding, but are still only averaging around 100 sales per annum. Median prices paid specifically for strata titled premises have increased mildly over the past several years, but the firm ultimately found that prices per square metre of floor area are mostly stable within the $2,500 to $4,500 range.
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Cairns retail market remains flat: HTW Commercial

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The Cassowary Coast Regional Council area has seen a continued resurgence of the banana farm market, according to the latest rural report from valuation firm Herron Todd White.
Since July 2019, approximately 20 per cent of total rural sales over 20 ha comprise sales purchased for conversion to banana production or of going concern banana farms.
Banana prices have gradually improved since its 2016 low caused by the Panama TR4 banana disease, according to the report.
<img src="https://www.urban.com.au/images/Screen%20Shot%202020-09-10%20at%2011.43.40%20am.png" alt="">
Recent trends in banana prices in the Brisbane and Melbourne have both increased.
HTW director Danny Glasson notes 60 sales over 20ha has occurred in the region since July last year.
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Cairns region sees the resurgence of the banana farm market: HTW Rural

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McGrath Estate Agents have opened a new office in Cairns, the second for the group in North Queensland.
McGrath chief executive John McGrath said he expects significant growth in Cairns and North Queensland over the coming years, as a result of a lower Australian dollar, heightened tourism activity and an upsurge in new development.
McGrath Cairns will be led by Principals, Matt Powe and Kirsty Kernot. Seven sales agents will join the team at McGrath Cairns.
Matt Powe said since 2012 the market has trended upwards after a sustained period of negative growth. 
"However Cairns remains an affordable city to raise a family with excellent schools and lifestyle and recreational facilities," he said.
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The new office will service Palm Cove, Gordonvale, Cairns City and Kuranda. The top five suburbs to be serviced include Edge Hill, Redlynch, Kewarra Beach, Kanimbla and Cairns City. 
 
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McGrath Estate Agents opens Cairns office

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Stockland Cairns – a nearly 50,000 square metre shopping centre in Cairns — is up for sale through an International Expressions of Interest (EOI) campaign closing March 31.
The sale is expected to fetch more than $230 million for the Stockland Group, which has appointed JLL’s Simon Rooney for the campaign.
Stockland Cairns, spread over 49,532 sqm, is a triple DDS anchored sub-regional shopping centre comprising a Big W, Target, Harris Scarfe, Coles, Woolworths, BCC six screen cinema complex, in addition to 10 mini majors, 110 specialty tenancies and kiosks.
“Investors continue to see long-term value in the Queensland retail market. Investment into retail assets in Queensland continues to strengthen from year to year. Total transaction activity has risen from $1.4 billion in 2013, to $1.7 billion in 2014 and to a record-high of $2.3 billion in 2015,” said Rooney.
“There have been very few opportunities historically to acquire a 100% interest in a major, high quality retail asset over $200 million in Queensland. We have recorded just three transactions above this threshold in the last 10-years. One of those transactions occurred directly off-market and one was part of a national portfolio.”
He said several institutional retail landlords bought assets in Queensland last year to increase exposure to the state. Blackstone acquired Westfield Strathpine as part of a wider portfolio transaction for $655.5 million, QIC bought Domain Central Homemaker Centre (nearly $130 million) and Hinkler Central ($110 million) and LaSalle Investment Management acquired three retail assets totalling $171 million.
“We expect Stockland Cairns will be highly sought after given the high level of demand for major retail assets in Queensland and the shortage of opportunities to acquire major assets,” said Rooney.
“The resurgence in inbound tourism, which follows the depreciation in the AUD, is supporting the local economies of major tourist regions such as Far North Queensland. Overseas visitor arrivals have increased by over 7% year-on-year, nationally, which supports a positive outlook for retail trading conditions.”
Stockland Cairns benefits from its location at the gateway to the southern growth corridor of the Cairns region, with 247,030 residents within the total trade area, including 168,810 residents in the main trade area.
Several major tenants including Target and Woolworths have renewed their leases to July 2022 and June 2036, respectively, as well as a brand new lease to Harris Scarfe to May 2026.
<a href="/expert-insights/investing/50253-stockland-reports-reported-an-8-1-percent-increase-in-first-half-underlying-profit" target="_blank">Stockland</a>, Australia's largest diversified real estate investment trust, reported on Wednesday an 8.1 percent rise in first-half underlying profit to $313 million.
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Stockland Cairns comes to market with a price tag of $230 million plus

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Cairns remains a rising market, following a year of continued growth and consolidation as a result of its steadily improving economy and the market being positioned in the rising market phase of the property cycle throughout the year, say Herron Todd White in their latest property clock.
Valuation firm Herron Todd White’s property clock is a simple broad brush means to suggest where property markets are as at March 2016 and what direction prices are moving in.
<a href="/images/2016/03/2/Screen%20Shot%202016-03-02%20at%2010.20.25%20AM.png" target="_blank">Click to enlarge</a>
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Cairns is typically counter-cyclical to the national market, according to HTW. Whenever the national economy slows and the Australian dollar falls, the Cairns tourism industry becomes more competitive, the local economy improves and the real estate market revitalises.
There is good demand for most residential property types and although sales growth has eased, prices continue to rise. 
HTW expects 2016 sales volumes to see a slow but steady increase and flow through to price rises being maintained typically at around the 5% mark. 
There will be on-going demand for rental property which, given the relatively slow rate of new housing development and tighter lending conditions to investors, will keep the supply of rental property moderately tight and maintain a slight upward pressure on rents. 
Cairns remains in a positive position at present compared to the downward adjustments taking place in the major capitals. 
The median price of units in the city was $370,000 at the end of 2015, according to RP Data. There was no comparable data for houses.
As an example of recently sold units around the median, a two-bedroom dwelling at <a href="https://realestateview.com.au/real-estate/161-163-esplanade-cairns-city-qld/property-details-sold-residential-9716215" target="_blank">161-163 Esplanade</a> sold for $388,000, according to www.realestateview.com.au.
HTW noted with new construction and development remaining quiet in Cairns, gentrification is not an especially strong force in the overall development landscape.
The inner suburbs of Cairns North and Parramatta Park have traditionally been the popular gentrification areas of Cairns, with some extension into suburbs such as Edge Hill, Manunda and Westcourt.
It noted the slowdown in new unit development in Cairns.
There was something like 980 new units built on greenfield or recycled sites in Cairns North over the period from 2000 to 2008.
"However there’s been absolutely nothing since."
Parramatta Park has experienced significant gentrification over the years typically based on renovation and modernisation of its older style Queenslander dwellings. This also reflects the character precincts in place in much of Parramatta Park as opposed to the more blank canvas development approach that has taken place in Cairns North.
"By way of example, renovated Queenslanders in Parramatta Park currently command a market range typically of $450,000 to $600,000, compared to a typical market range of $350,000 to $450,000 for unrenovated dwellings." 
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Counter-cyclical Cairns in a positive position in 2016: HTW property clock 

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Eagles Nest, a prestige property at Rocky Point in the Port Douglas region of Queensland is up for sale for $7,250,000. 
Perched high in the Daintree Rainforest with views across the Coral Sea toward the Great Barrier Reef, the house is a 20-minute drive inland from Port Douglas.
By air, it's a 15-minute flight from Cairns International Airport to a private helipad.
Constructed to uncompromising standards, the Indonesian-inspired roof-line covers 1,000 sqm of interior living space and covered verandas.
All its indoors and out are seamless to achieve tropical living at its easiest. 
With the living areas located primarily on the ground level, the foyer opens to formal living, library, and dining rooms of grand proportions. 
An open plan lounge room and entertainer’s kitchen with casual dining adjoins a covered outdoor dining area and swimming pool.  
There are three master bedrooms each with an ensuite, with the main bedroom suite offering views of the Coral Sea and Mossman Valley. 
Located on the top floor is a master den with private balcony and telescopic observatory.
A second study or staff quarters is on the ground level. 
Amenities include an Italian glass-tiled swimming pool and spa with water features; tennis court and helipad.
All state-of-the-art built with technology, and security.  
Moments away are Rocky Point white-sand swimming beach and Trinity Bay for water sports.
The home at <a href="https://www.raineandhorne.com.au/mossman/properties/rocky-point-rocky-point-4873-queensland" target="_blank">10-12 Hibiscus Court, Rocky Point</a> has been listed through Raine &amp; Horne Port Douglas agent, Barbara Wolveridge by Cheryl and Malcolm McKellar.
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Port Douglas trophy Eagles Nest listed

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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.
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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.
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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 <a href="https://www.realestate.com.au/property-house-qld-edmonton-122382446" target="_blank">18 Novelli Street Edmonton Qld 4869</a> sold for $372,000.
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A three-bedroom house with a double garage at <a href="https://www.realestate.com.au/property-house-qld-gordonvale-122094146" target="_blank">28 Buzacott Street Gordonvale Qld 4865 </a>sold for $273,000.
 
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Investor market soft in Cairns' fringes: HTW

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Half-a-million dollars offers plenty of property options to owner occupiers or investors in Queensland’s Cairns because the sum is well above the median prices, say valuation firm Herron Todd White in their July residential market report.
A $500,000 property investment in Cairns will secure a well located modern executive style suburban dwelling or alternatively an above average quality apartment in the Cairns CBD, located on the mid to upper levels of a near new high rise unit development. 
“Indeed the purchaser or investor at this price level would find a large range of sectors, styles and locations available to choose from. However, it remains impossible to spend $500,000 on a new apartment due to the absence of new unit construction at that level,” says the HTW report. 
The $500,000 mark in the Cairns market is relative to the current (April 2016) median price levels of approximately $385,000 for houses and $220,000 for apartments. Over the past twelve months, 75% of houses and 95% of apartments sold in Cairns transacted for $500,000 or under. 
The Cairns market sits at the rising market stage of the cycle but is currently experiencing a pause due to factors such as tighter investment lending criteria and the uncertainty over negative gearing. This is indicated by sales volumes progressively softening over the past six to nine months while prices have reverted to minimal to no growth. 
“Nevertheless our prognosis is for the market to return to slow growth as the region’s tourism-based economy continues to improve,” says the report.
Property Observer looked up a recent sale on www.realestate.com.au that fits the bill. A three-bedroom, two-bathroom house at <a href="https://www.realestate.com.au/property-house-qld-cairns-122643390" target="_blank">5 McCrae Street, Cairns, Qld 4870</a> sold for $397,000.
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