SOURCE: The Cairns Post September 11, 2015
BUYERS are resisting an increase in Cairns house prices as median values rise.
But the industry believes it will not last as the economy continues to rebound.
The latest CoreLogic report shows median values across Cairns have risen by 4.7 per cent for houses to $372,345, while units have increased by 3.8 per cent to $226,600 over the year to June 2015.
“Sales volumes are at the highest levels they have been since 2008, with current activity up 4.3 per cent from May 2014, and 20.4 per cent above the five-year average,” the report said.
“Homes are selling faster than they were 12 months ago, with the average house selling in 79 days, seven days faster than May 2014, while the average unit is taking 12 less days to sell (90 days).”
Herron Todd White research director Rick Carr said the real estate market had been increasing in both sales volumes and prices as the economy improved over the last four years.
“The market has changed from being purely a ‘buyers market’ four years ago to one where buyers and sellers have balanced negotiating power in the current market,” he said.
“There is evidence that the market has eased off over the last two months from buyer resistance to increased prices.”
“There is still increasing demand for property, but buyers only want to pay yesterday’s prices not today’s,” Mr Carr said.
“However, that won’t last and the expectation for 2016 is for continuing property price and volume growth as the economy continues to revive.”
Real Estate Institute of Queensland Far Northern zone chairman Greg Clyde-Smith said, while the figures reflected the 12 months to June, the June quarter was showing signs of slowing.
“Vacancy rates have eased to 2.7 per cent and house sales activity has eased slightly down 4 per cent with the yearly figure up 5 per cent,” he said.
LJ Hooker Cairns Edge Hill principal Ross Moller said the market had softened since the stock market turmoils and banks were making it harder for lenders.
He said the Australian Prudential Regulation Authority had tightened restrictions, and investors and even owner-occupiers were finding it harder to get finance and mortgage insurance.
Mr Moller said even the slightest blemish on someone’s credit rating was a reason for finance being refused.
McGrath Estate Agents Cairns principal Matt Powe said a bumper tourism season had influenced real estate.
“The market has seen an increase in yield of some of the hotel-style apartments, more longer term accommodation in the form of higher rents as well as higher house and unit prices,” Mr Powe said.
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Jason Thomson | Finance Broker and Mortgage Adviser | Smartline Cairns