“The Cairns economic recovery regathered slightly over the last month, particularly through reduced unemployment. However the property market is still yet to change from a ‘Steady State’ position.” – Rick Carr, Research Director, Herron Todd White Cairns.
Details of HTW’s July 2018 CairnsWatch report follows in this Cairns Property Market Update:
(Click here to find more recent Cairns Property Market Updates)
Cairns Property Prices
Median property price trends have remained steady for houses over the last six months, but have wobbled for units and land as a result of changes in their compositional mix. Our view is that most property prices are no more than plus or minus 5% different from what they were twelve months ago, and that their overall balance has remained static. The latest trend median prices, for properties sold in the month of June 2018, came in at $411,000 for a house, $206,000 for a unit, and $206,000 for a block of land. 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 Vacancies
Though rental vacancy trends have crept up slightly over the last six months, rental vacancy rates remain low and continue to indicate tight verging on stressed market conditions. Our latest survey results show that the trend rental vacancy rates for June 2018 stood at 2.0% for houses, 1.8% for units and 1.9% overall. Coupled with the low level of new rental supply being created due to relatively low levels of new housing construction and reduced levels of investor housing activity, rental market conditions are expected to stay tight and/or stressed for some time.
Cairns Building Approvals
Building approval figures for new houses experienced a sudden jump during May 2018, which in conjunction with the April 2018 spike in unit approvals from the first component of the Nova City development, have led to a strong technical rise in the overall building approval trend, up by 47.9% over the period from May 2017 to May 2018 and 111.3% over the period from December 2017 to May 2018. Whilst it remains to be seen whether the heightened building approval trends will continue, especially for new houses, it is nevertheless pointing to a welcome pickup in construction activity in coming months.
Special Topic: Cairns House Sale Price Brackets
House sales within Cairns have undergone a dramatic change in their proportional market mix over the last six months. House sales in the midmarket category, priced from $350,000 to $600,000, have reduced as an overall percentage of sales, from 64% of the market in the quarter ended December 2017, to 56% in the quarter ended June 2018. Sales in the sub- $350,000 category have correspondingly increased from 25% of the market in the quarter ended December 2017 to 32% in the quarter ended June 2018, while sales in the upper category of $600,000 and above have risen from 11% to 13% of the market over the same period. The shift in the sales mix toward the respective market ‘extremes’ could well be a sign of improved market confidence influencing first home and high end buyers 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. Though real estate sales volumes are starting to pick up, especially at the market extremities as per our Special Topic analysis, the absence of any accompanying price growth means we still regard Cairns as being in a ‘Steady State’ position.
Trended employment figures for the Cairns Region (inclusive of Cairns, the Cassowary Coast, Douglas and the Tablelands) estimate that there were 112,400 persons employed during June 2018, down from the estimate of 113,000 persons employed during May 2018. Trend employment calculations continue to indicate a loss of nearly 6,000 persons in jobs over the 12 months from June 2017 to June 2018, equivalent to a 5.0% reduction over the period. 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 actual nor the trend estimates should be interpreted as precise values.
In a sudden turn of events, the latest statistics are now indicating that the unemployment rate in the Cairns Region has steadied and is starting to reduce. The Cairns Region had a seasonally adjusted trend unemployment rate of 6.5% as at June 2018, down from the revised trend estimate of 6.6% as at May 2018. Importantly also, the Cairns Region’s unemployment rate is now trending back closer towards the State’s unemployment rate average of 6.1%. 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
Though the trend in the number of jobs being advertised on employment websites for the Cairns and Far North region has been softening since the start of 2018, it remains at comparatively strong levels. The seasonally adjusted trend in the number of jobs being advertised in June 2018 is 9.1% higher than it was in June 2017, but has slipped 3.1% compared to January 2018.
Cairns Airport Passenger Numbers
Passenger number trends at Cairns Airport eased back a notch during June 2018 for travellers on domestic origin/destination flights, and a notch further for those on international origin/destination flights. Nevertheless there remains an overall airport passenger trend increase of 0.3% over the 12 months from June 2017 to June 2018, consisting of a 0.7% trend passenger increase on domestic flights and a 2.4% trend passenger reduction on international flights. Cairns Airport comment that this year’s June domestic passenger figures have been impacted by Queensland’s later than normal school holidays, which is a factor not accounted for in our trend calculation process.
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