Cairns median forecast to reach $435,000 by 2018, but could go higher.
(Source: The Cairns Post Friday October 30 2015)
A global insurer is predicting a $35,000 jump in Cairns house prices within the next three years off the back of an expected international tourist rush.
QBE’s Australian Housing Outlook 2015-2018 report is forecasting a 9 per cent median house price increase to $435,000 by June 2018, but a Cairns property expert has said the forecast is conservative.
Herron Todd White Cairns research director Rick Carr said his prediction would be close to $60,000 – or 15 per cent – price rise by mid-2018.
“I wouldn’t disagree with the report, it’s a plausible outcome,” Mr Carr said.
“They are saying house price rates will continue over the next three years and I’d agree with that.
“My view is that the economy will continue to slowly improve so that will continue to provide steady price growth in the real estate market.
“I’d still say there would be price growth of 5 per cent a year so more likely 15 per cent (by June 2018), but there is a fair margin of error attached to that.”
The report took into account strong investor growth, previous price trends, international arrivals and low interest rates in projecting their figures.
“An expected pick-up in international tourism (in Cairns) and higher migration inflows should boost underlying demand and residential construction activity,” the report said.
Locally, the median house price growth eased from an average of 5.9 per cent each year in the two years to 2013-14, to 2.8 per cent in 2014-15. However, the median house price lifted for the first time to $400,000 in June this year.
The report also forecast Brisbane to beat other Australian capital cities for the highest growth in the property market.
QBE LMI CEO Phil White said the current residential cycle was mainly driven by investors, who represent about 50 per cent of the national market.
“With loans to first home buyers and non-first home buyers declining or rising very slowly across the states, investors are now the most active market group,” Mr White said.
“Brisbane’s continuing affordability is expected to see it attain the highest growth rate of all capital cities over the 2015-2018 period, resulting in a median house price of $575,000 in 2018, which will be 13 per cent above the median house price of $511,300 in June this year.”
Investors are also expected to swarm to the bright lights of the Gold Coast to lift house prices by 14 per cent to $615,000 by June 2018.
To keep up-to-date with all the latest local real estate and other economic news for Cairns, make sure you’ve subscribed to my free weekly email newsletter that is solely dedicated to keeping you informed on what’s going on in our local economy. Click the banner below and simply provide your name and email address. It’s easy to unsubscribe if you don’t find it of use.
Jason Thomson | Mortgage Adviser and Finance Broker | Smartline Cairns