The latest Herron Todd White Cairns Watch report reveals the Cairns economy has started 2016 on a positive economic note with forward progress in its key indicators, most noticeably in connection with the labour market. However to be of benefit the turnaround needs to be sustained.
The Cairns median house price has steadied in recent months, with the median house price trend coming in at $406,100 in November 2015. This indicates a trend rise of 2.4% over the latest 12 months. Meanwhile the trend in the median unit price has also steadied off at $219,200 in November 2015. The median land price trend reduced to $189,200 in November 2015, impacted in recent months by compositional change due to increasing proportions of Southern Corridor land sales in the sales mix.
N.B. The median property price is the actual sale price of the middle-priced property from the list of properties sold each month. Movements in median prices do not necessarily equate to movements in individual property values.
The slowdown in residential sale volumes and the lack of price growth has led to a corresponding slowdown in the number of properties being listed for sale during the last half of 2015. The trend in the number of properties listed for sale stood at approximately 2,500 in the December quarter of 2015. Though there has been quite an increase from the 2,275 listings in the December quarter of 2014, there has been virtually no change over the latest six months.
Rental vacancy rate trends have started to tighten a little over the last three months, especially for units as opposed to houses. Rental vacancies overall continue to demonstrate a moderately tight rental supply. The trend rental vacancy rates for December 2015 stood at 2.4% for houses and 2.8% for units. The market vacancy trend overall stood at 2.6%.
Low rental vacancy rates are continuing to place mild upward pressure on rents. Over the twelve months to December 2015 the Cairns weighted average median rent has increased by $5 per week, from $385 to $390 per week for houses, and from $270 to $275 per week for units.
N.B. The median rent is the middle-priced rental from the list of properties rented during the quarter. Movements in median rents do not necessarily equate to movements in individual property rents.
Building approvals specifically for houses rose to a seven-year high in November 2015, which combined with the ‘spike’ in unit approvals in October 2015, have brought the overall building approvals trend also to a five-year high. The net result is that the building approvals trend has shown a 35.0% increase over the period from November 2014 to November 2015 and an 83.4% increase over the period from November 2010 to November 2015. Albeit in the latter case the increase has come from a very low base.
Property market conditions remain varied on the Atherton Tablelands. In median price terms, house prices in Atherton have been relatively steady over the last three years, and are yet to regain the levels experienced at the 2008 peak. In addition, prices in Atherton have lost parity with those in Southern Cairns, where prices steadily risen. Meanwhile in Mareeba, median prices have been volatile, affected by their quarter-to-quarter compositional mix. The current drop in Mareeba’s median house price is the result of an increasing run of cheaper priced property sales, not of declining values. Individual house prices in Mareeba are regarded as steady to mildly increasing.
Herron Todd White’s National Property Clock is prepared each month based on the local market perceptions of its Australia-wide network of offices. The Cairns market is currently at the ‘Rising Market’ stage of the cycle.
ABS headline figures for the Cairns Region (inclusive of Cairns, the Cassowary Coast, Douglas and the Tablelands) estimate that there were 111,200 persons employed during December 2015, up from the estimate of 107,300 persons employed during November 2015.
Trend calculations have been affected by changes in the processes the ABS uses to derive State and national trends (which we emulate to derive the local trend). In our estimation, the Cairns regional employment trend has now steadied at 107,000 persons employed in December 2015, ending the run of employment reductions previously evident.
N.B. The ABS Labour Force figures are estimates derived from a sample survey of only about 500 Cairns Region residents, and hence are subject to a potentially large margin of error. Neither the headline nor the trend estimates should be interpreted as precise values.
Even though there was an encouraging increase in headline employment in December 2015, the Cairns Region’s headline unemployment rate also rose, to 7.2%, as extra people (such as school leavers) started looking for work.
Unemployment trend calculations have become increasingly uncertain following ABS methodology changes. According to our best guess, the trend rate of unemployment stood at 7.6% and falling in December 2015. The region’s unemployment rate remains higher than the State average of 5.9%, but the differential is narrowing.
N.B. To be counted as ‘unemployed’ in the ABS Labour Force survey you need to not have a job and be actively seeking work. People who do not have a job and are not actively seeking work are not counted as unemployed, they are regarded as ‘not in the labour force’.
The number of jobs being advertised in The Cairns Post has shown a static to mildly softening trend over past two years, influenced by changing modes of job advertising from print to on-line media.
Meanwhile the trend in internet job ads for the Cairns and Far North region has rebuilt somewhat over the last six months. A 2.8% increase in the job ads trend is evident over the period from December 2014 to December 2015.
The passenger trend at the domestic terminal reverted to record high levels in December 2015, and shows a 2.9% increase since December 2014. Meanwhile passenger trends at the international terminal have also started rising, and should gain continued impetus from Philippine Airlines having commenced direct flights to Auckland and Manila in December 2015 and strong seasonal flight activity to Cairns over the Chinese New Year period in in January/February 2016. The international terminal passenger trend has increased 14.1% over the period from December 2014 to December 2015. Passenger numbers for the 2015 calendar year as a whole grew by 5.7%, resulting from 4.4% growth at the domestic terminal and 15.5% growth at the international.