The month in review: Cairns

By Herron Todd White
October, 2009

The property sector in Cairns that has had most difficulty coping with the fall-out from the Global Financial Crisis relative to property in general appears to have been the tourist apartment sector. Sales activity in this sector had been slowing even before the GFC hit, but since that time, sales have slowed further and vendors are becoming more motivated. There is stock remaining unsold from developments in both Palm Cove and the CBD that have been completed for some time. This has resulted in an almost complete cessation of new tourist apartment development pending the absorption of outstanding stock.

The Port Douglas property market has also slowed substantially in activity since the beginning of 2008, with the tourist apartment sector in particular being affected by a shortage of potential buyers. This was initially caused by the high Australian dollar and high airline fuel
prices lowering the number of visitors holidaying in the location. The high interest rates which prevailed for much of 2008 also compounded the slowing market. Though interest rates, the exchange rate and fuel prices all fell at the end of 2008, fears of a slowdown in world tourism due to the state of the global economic conditions affected confidence in the local industry, economy and property market. There has been a large supply of unsold property on the market and price falls of up to 30% have been experienced, particularly in the apartments sector.

Recent months have seen some return to buying activity as tourist numbers and confidence have rebuilt, though this is yet to be manifested in increased prices.

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