Cairns Property Market Update – September 2019

 

“The Cairns economy continues to show improvement on the employment front, but forward indicators such as tourism and construction remain soft. Meanwhile the Cairns property market has shown sales volume start to regain, but there is no movement as yet in price.” – Rick Carr, Research Consultant, Herron Todd White Cairns.

Details of HTW’s September 2019 CairnsWatch report is as follows:

 

Cairns Property Sales

Real estate sales volumes bottomed out during the first quarter of 2019, and now appear to be rebuilding. The trend number of sales taking place in the June quarter of 2019 totalled 910, but still came in 12.4% below the levels observed in the June quarter of 2018. However the expectation is that with the retention of negative gearing, reduced interest rates, finance conditions moderating and the local economy strengthening, real estate sales volumes will generally increase over coming quarters.

 

Cairns Property Prices

Median property sale price trends remain basically flat for houses and units, but have varied for land as a result of low volumes of sales. The latest trend median prices, for properties sold in the month of August 2019, came in at $413,000 for houses, $221,000 for units, and $203,000 for vacant land. Twelve month median trend price moments, for the period from August 2018 to August 2019, stood at +1.3% for houses and -0.6% 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 Vacancies

 

The story remains the same for the Cairns rental market during 2019, as it continues to demonstrate tight verging on stressed rental market conditions. Our latest survey results show the trend rental vacancy rates for August 2019 standing at 1.7% for houses and units alike. 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 Building Approvals

Building approval figures have been increasing in trend terms over the last six months, but from a very low base and heavily influenced by the one-off approval of 56 new social housing units in June 2019. The underlying levels of new building approvals otherwise remains low. It highlights the still parlous state of the residential property market and the tough competition new housing construction faces from prices in the established housing market.

 

Special Topic: House Sales in Cairns

Property sale volumes in Cairns has shown a distinct cyclical pattern over the ten-year period from June 2009 to June 2019, Sales rates overall have declined by 27% over this period, with the sales decline most pronounced in Western Cairns and the Southern Corridor. Meanwhile in price terms, ten year price growth has been strongest in Central Cairns and slowest in the Southern Corridor. The ten-year median trend price increases came in at +21.1% in Central Cairns, +15.1% in Western Cairns, +13.0% on the Northern Beaches, +5.3% in the Southern Corridor and +17.4% overall.

 

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. Cairns has been in a ‘Steady State’ position for some time.

 

Cairns Employment

Trended employment figures for the Cairns Region (inclusive of Cairns, the Cassowary Coast, Douglas and the Tablelands) estimate that there were 131,300 persons employed during August 2019, down slightly from the estimate of 131,900 persons employed during June 2019. The statistically measured employment trend shows 15,500 extra people in jobs since August 2018, an increase of 13.3%. These increases remain at the upper end of local business belief, with the widespread perception being 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.

 

Cairns Unemployment

The trend unemployment rate in the Cairns Region has been rising since the start of 2019 due to more people coming out of the woodwork to look for work. The Cairns Region recorded a seasonally adjusted trend unemployment rate of 5.4% as at August 2019, up from 4.0% in January 2019, but still below the 5.9% recorded in August 2018. Unemployment in the Cairns Region remains below the August 2019 State average of 6.4%. 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 Region Job Ads

The trend in the number of jobs being advertised on employment websites for the Cairns and Far North region has eased back slightly, but not worryingly, from the record high levels reached earlier this year. Even so, the trend in August 2019 job ads is still 4.5% above the level which prevailed in August 2018. The current level of job availability is indicative of employment generally increasing in coming months.

 

Cairns Airport Passenger Numbers

Passenger number trends at Cairns Airport are presently flat-lining, but show an overall airport passenger trend reduction of 2.5% over the period from August 2018 to August 2019. This has resulted from a 3.4% trend passenger reduction on domestic flights, partially offset by a 3.0% trend passenger increase on international flights, over the same period.

 

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