“The Cairns economy continues to move ahead with improvements on the employment and labour market front, though with continued suspicion as to the statistically measured pace. Meanwhile forward indicators such as tourism and construction remain slow. The Cairns property market is maintaining a ‘Steady State’ position, tight rental vacancy conditions and very low levels of new housing construction.” – Rick Carr, Research Consultant, Herron Todd White Cairns.
Details of HTW’s July 2019 CairnsWatch report is as follows:
Cairns Property Prices
Median property sale price trends have shown varied outcomes for the 2017-18 financial year, with a measured increase of 3.7% for houses offset by measured decreases of 5.3% for units and 6.5% for land, all from June 2018 to June 2019. The latest trend median prices, for properties sold in the month of June 2019, came in at $418,000 for houses, $209,000 for units, and $200,000 for vacant land. Sales rates anecdotally are now starting to rebuild from their pre-election slowdown, which may help consolidate confidence, demand and prices over the coming months.
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
The rental market continues to demonstrate tight verging on stressed rental market conditions. Our latest survey results show that the trend rental vacancy rates for June 2019 stood at 1.7% for houses, 1.9% for units and 1.8% 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 expected 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 June 2019 the Cairns weighted average median rent has lifted from $410 to $415 per week for houses, and from $295 to $300 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 stubbornly low levels over the last six months. The May 2019 trend stood at just 40 new dwellings being approved per month, consisting entirely of new houses and no new units. The low levels of new building approvals highlight the parlous state of the residential property market at present, as well as the tough competitive state of new housing construction due to price pressures from sales in the established housing market.
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 there have been a number of movements in the clock since the last CairnsWatch, Cairns is still maintaining 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 a record 134,400 persons employed during June 2019, up from the estimate of 132,300 persons employed during April 2019. The calculated employment trend shows almost 21,000 extra people in jobs since June 2018, an increase of 18.7%. However local business perceptions are that economic and employment conditions are still only gradually improving, and that the true increase has been nowhere near as rapid.
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 nudged higher over the last four months as despite more people being in jobs, even more have come out of the woodwork to look for work. The Cairns Region recorded a seasonally adjusted trend unemployment rate of 4.3% as at June 2019, up from the revised trend estimate of 4.0% as at February 2019 and 6.6% as at June 2018. Again however, the current reading is regarded as a statistical anomaly which does not reflect reality. The general belief is that the Region’s unemployment rate has lowered only slowly over the last twelve months.
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 continues to increase, and furthermore reached record levels in June 2019. Job ads have increased in trend by 10.3% over the twelve months from June 2018 to June 2019. This is a more closely believable indicator of the strength of jobs growth than the 18.7% increase in persons in jobs conveyed by the employment statistics.
Cairns Airport Passenger Numbers
Passenger number trends at Cairns Airport remain soft, with an overall airport passenger trend reduction of 2.7% over the period from June 2018 to June 2019. This has resulted from a 3.2% trend passenger reduction on domestic flights, partially offset by a 0.1% trend passenger increase on international flights, over the same period.