“Although the Cairns economy has continued to slowly improve during the course of 2019, current business conditions remain tough, influenced by a slowdown in tourism numbers, soft construction activity, and a plateau in employment growth. In addition, there are more clouds gathering on the horizon (e.g. from coronavirus) than there are rays of sunlight. Similarly the Cairns property market has continued to plod along during 2019 with its fundamental state remaining unchanged.” – Rick Carr, Research Consultant, Herron Todd White Cairns.
Details of HTW’s January 2020 CairnsWatch report is as follows:
Cairns Property Prices
Median house sale price trends appear to have firmed slightly during the latter half of 2019, but have wavered for land and units in tandem with volatile market composition. The latest trend median prices, for properties sold in the month of December 2019, came in at $422,500 for houses, $215,000 for units, and $214,500 for vacant land. Twelve month median trend price movements, for the period from December 2018 to December 2019, stood at plus 2.1% for houses and minus 2.2% for units. 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.
Cairns Rental Market
The Cairns rental market has changed little during the course of 2019, continuing to demonstrate tight verging on stressed rental market conditions. Our latest survey results show the trend rental vacancy rates for December 2019 standing at 1.7% for houses, 1.9% for units and 1.7% overall. Coupled with the very low level of new rental supply being created due to low levels of new housing construction and reduced levels of investor housing activity, rental market conditions are bound to stay tight and/or stressed for some time.
Cairns Property Rents
Consistently low rental vacancy rates have been placing mild upward pressure on rents in year-on-year terms for the last six years. Over the twelve months to December 2019 the Cairns weighted average median rent has lifted from $415 to $425 per week for houses, and from $295 to $305 per week for units. The very low rental vacancy rates being observed in the current market are likely to maintain mild upward pressure on rents in coming quarters, but will not be able do so indefinitely for rental affordability reasons. N.B. The median rent is the middle-priced rental from properties rented during the quarter. Movements in median rents do not necessarily equate to movements in individual property rental values.
Cairns Building Approvals
Building approval figures have remained at consistently low levels during the course of 2019, in tandem with low levels of new land sales and housing construction. The November 2019 trend building approvals level stood at stood at 42 new dwellings approved for construction, consisting entirely of houses and no units. Current building approval levels are running at only about 40% of their average for the last twenty years, highlighting the still parlous state of the residential property market and the tough competition new housing construction faces from prices in the established housing market for both houses and units alike.
National Property Clock
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 lack of change in the Cairns market has meant that Cairns has been in a ‘Steady State’ position for some time.
Trend employment figures for the Cairns Region (inclusive of Cairns, the Cassowary Coast, Douglas and the Tablelands) have eased back a touch from the record high observed in June 2019, suggesting that employment growth has plateaued. The figures show a trend level of 130,700 persons employed during December 2019, down slightly from the trend estimate of 131,100 persons employed during June 2019. However the employment trend still indicates an increase of 6,700 people in jobs during the course of 2019, an increase of 5.4%. N.B. The ABS Labour Force figures are estimates derived from a sample survey of less than 500 Cairns Region residents, and hence are subject to a potentially large margin of error. Neither the actual nor the trend estimates should be interpreted as precise values.
The trend unemployment rate in the Cairns Region has been rising since the start of 2019, initially due to more people coming out of the woodwork to look for work, but more recently as employment growth has plateaued. The Cairns Region recorded a seasonally adjusted trend unemployment rate of 5.8% as at December 2019, up from 4.2% in December 2018. Unemployment in the Cairns Region now sits only marginally below the Queensland State average, which stood at 6.0% in December 2019. 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’.
Cairns Job Ads
The trend in the number of jobs being advertised on employment websites for the Cairns and Far North region has steadily increased over the last four months, reaching an all-time high in December 2019. The December 2019 trend in job ads also stands 4.0% above the level which prevailed in December 2018.
Cairns Airport Passenger Numbers
Passenger number trends at Cairns Airport have eased back during the course of 2019 for passengers arriving/departing on domestic flights, potentially due to a slowdown in the number of international visitors accessing Cairns via domestic services from other Australian locations. Meanwhile trend numbers have dropped more noticeably for passengers arriving/departing on international flights, coinciding with the withdrawal of Cathay Pacific services in October 2019. The latest figures show an overall airport passenger trend reduction of 2.7% over the period from December 2018 to December 2019, resulting from a 2.1% trend passenger reduction on domestic flights, and a 6.4% trend passenger reduction on international flights.
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