The Cairns property market is now being eagerly watched by interstate investors after the news broke in 2013 of a new mega casino resort “Aquis” being planned for the small beach side suburb of Yorkeys Knob.
2014 is shaping up to be a defining moment for property prices in Cairns with most real estate agents, including our city office reporting exceptionally busy turnover rates in November and December just passed in 2013.
Capital gains for home owners are starting to appear again in Cairns with an increase in median house prices from Oct 2012 to Oct 2013 of 3.7%. Considering that included large volumes of bank mortgage sales, now gone from the market, the prospect of medium house prices to increase in 2014 are look positive.
The anticipation of a new Casino is one reason for a healthy Cairns market, but there are others also. Mining companies are now structuring there workforce around the convenience of the Airport, The development of PNG to the north and expanding number of Asian flights into Cairns will flow into the local economy, already buoyed by a great tourist season.
The population of Cairns has been steadily increasing. A 2.6% increase in 2012 was well above the national average of 1.5%. The current official population of Cairns Regional Council area is 165,388 as of the 30th June 2012. 2830 people moved to Cairns that year. This is evidence why the Cairns rental market has consistently had low vacancy rates and why rents have risen by over 10% last year.
Hypothetically speaking, if the resort goes ahead, thousands of extra workers will stream into Cairns. If the Australian dollar decrease and stabilises below 85c to the $US, international tourists numbers will increase. Added to this the natural population increases, Cairns will see a shortage of accommodation. This will result in a very tight rental market resulting in higher rental returns for investors.
The Cairns vacancy rate for houses stood at 2.1% in Nov 2013, while units recorded a vacancy rate of 2.5%. The market vacancy trend overall stood at 2.3%. The national vacancy rate is 2.6%, however CBD vacancies in Melbourne reached 5.8% and Brisbane’s CBD currently sitting at 5.4%, Gladstone recorded a vacancy rate of 11.1% and Mackey 6.8%. Cairns vacancy rates at present are good for investors and I dare say yield to capital out lay would be even better.
Compared to other parts of Australia, Cairns is cheap for investors to buy into. How long this lasts for, is a question for the crystal ball. It’s my bet however, that by Dec 2014 there will be no more bargains left for buyers and low vacancy rates will attract high volumes of interstate investors wanting to buy, driving property prices up.
Will the AQUIS CASINO RESORT get its anticipated nod of approval from the State and federal governments? I think so. Will the Hong Kong developer be true to his word and complete the $4.2 billion project? There’s a lot riding on it. Will Property prices go through the roof? The odds are starting to shorten. Will this be good for investors? It already is.
If you have enjoyed reading this article and would like information regarding our excellent Property Management service with very competitive rates that we already offer landlords, please feel free to contact DJ Smith Property on (07) 4041 1214 between 8:30am to 5:30pm Monday to Friday or call myself Darcy Smith on 0400 080 555. For general information regarding the Cairns market your most welcome to contact us any time.