By Herron Todd White
Due to a decade of subdued levels of construction, positive population growth, reasonably flat property prices and increasing rents, the Cairns residential property market offers some of the most attractive yields available anywhere in Australia.
CoreLogic’s Top Rental Performer’s Report recently named Woree and Manunda as the third and fourth highest yielding suburbs in the country, offering gross yields of 10.8% and 9.5% respectively. These types of yields are typically achievable from low price units and houses. Another property type where strong yields are available are holiday units in certain well-performing complexes. We have seen net yields for some dual-key units in excess of 8%, the only problems being that the units are only suitable for short term accommodation which makes obtaining finance difficult and the more volatile nature of the income as it is directly tied to tourism.
A key point about our market is the lack of pending supply and how it is difficult to see the current balance of supply and demand changing to an oversupply situation in the foreseeable future. This should give investors comfort that the low rental vacancy rates and current rent levels are due to solid market fundamentals and are unlikely to change in a negative way.
Speak with a Cairns Mortgage Broker today.
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.