HOUSES in Cairns are being snapped up as the city becomes one of the fastest-selling regional centres in the state.
SOURCE: The Cairns Post, September 16 2015
According to the REIQ June quarterly figures released this week, land sales increased a massive 40 per cent in the three months, while unit and townhouses experienced a 17 per cent boost in sales.
The city has also been listed as a “rising house market”, ahead of Townsville, Fraser Coast, Bundaberg, Gladstone, Rockhampton and Mackay.
“Average days on the market have improved (in Cairns) to 65 days – now equalling Toowoomba as the fastest-selling regional centre,’’ the report states.
“According to local agents, investors are once more focusing on the Cairns unit market, with the inner city receiving the most attention.
“The region also holds the lowest level of excess supply of all major regions in Queensland.”
FNQ Hot Property principal Nathan Shingles said homeowners were continuing to hold on to their properties in the hope of securing higher prices as the real estate market strengthened.
“Obviously Cairns is a rising market so it is limiting the supply of stock out there,’’ Mr Shingles said.
“Generally people can see value in the Cairns market overall.
“Continuing in a rising market, today’s prices might look like a bargain in 12 months’ time potentially.”
Mr Shingles said southern investors were spending their cash in the tropics, while locals were upgrading.
“It is very limited on the beaches for land” he said.
“There is new stock on the southside but on the beaches it is really limited.”
Ray White Cairns South agent Lynda Henley said she currently had five buyers awaiting the right blocks of land from Edmonton to Aloomba.
“It’s only a 20-minute drive to Cairns City,’’ Ms Henley said.
“There is not a huge availability of land.
“People are still holding on to their land and wanting top dollar for it.”
Ms Henley said there had also been a resurgence in inquiry for units and townhouses.
“There is a better return on units. The one I have got (listed) is being rented out at $230 or $240 a week, so it will be a 6 per cent return,” she said.
At the end of June, the REIQ’s residential rental survey revealed the city’s rental vacancy rate had eased to 2.7 per cent – the highest the region has recorded in more than three years.
“Local agents say tenant demand has softened, coupled with new unit developments adding to supply,’’ the report stated.
“Median rents remain healthy despite the easing vacancy rate.”
As a result, gross yields have improved significantly for both house and unit rentals and at 6.2 per cent, Cairns’ gross house yield is the highest of all major regions.
In the June quarter, the Cairns house market experienced a 4 per cent decrease in sales activity, but in the 12 months to June sales had increased by 5 per cent.
The region’s median house price is currently at $390,000 and three houses were sold for more $1 million in Cairns in the quarter.
According to the report, average vendor discounting had pushed out slightly over the three months to June to 6.1 per cent.
“This is said to be largely due to some vendors beginning to test the market by listing at a higher price,” the report said.
RELATED BLOG: REIQ Queensland Market Monitor – June 2015
To keep up-to-date with all the latest local real estate and other economic news for Cairns, make sure you’ve subscribed to my free weekly email newsletter that is solely dedicated to keeping you informed on what’s going on in our local economy. Click the banner below and simply provide your name and email address. It’s easy to unsubscribe if you don’t find it of use.
Jason Thomson | Finance Broker and Mortgage Adviser | Smartline Cairns