The month in review: Cairns
By Herron Todd White
December, 2009
Last February, we expected business and economic
conditions in Cairns to show only slow to steady growth
patterns during 2009, and for these conditions to result
in a relatively lacklustre property market for most of the
year. In hindsight, we were pretty much right, though
perhaps underestimated the severity of the current
economic downturn.
The Cairns economy experienced a tough year during
2009, with the slowdown in its two major industries
of tourism and construction causing a large jump in
unemployment. The good news, however, is that the
economy appears to have been through the worst of the
downturn and is in the process of stabilising. Even so, we
still expect relatively soft economic conditions in Cairns
to remain in place for the remainder of 2009-10, and for
the pace of the recovery to be relatively gradual. Because
of its international tourism exposure, Cairns could well be
one of the last regions in Queensland, if not Australia, to
come out of the current economic downturn.
Despite the economic situation, the Cairns property
market has shown a high degree of resilience during the
course of 2009. Sales volumes have increased during the
year, driven in part by the First Home Owner Grants doing
their job, and prices stabilising at about 5% to 10% below
the peak price level reached in early 2008. The perception
is that the market has now definitely bottomed.
Vacancies in the rental market have risen in line with our
expectations last February, influenced by a large supply
of newly constructed properties entering the rental pool
at the same time as a slowdown in demand. Our Cairns
Office rent roll survey for October 2009 shows a current
trend vacancy rate of 4.3% for houses, 6.3% for units, and
5.4% overall.
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