By Herron Todd White
September, October and November in Cairns are normally the months where work gets in the way of celebration and socialising with events such as the Cairns Amateurs and local and national sports finals. It is also the end of our peak tourist season. The Cairns Ironman 70.3 and Targa Great Barrier Reef events are still on although with intrastate participants only.
Spring is also the time of year in Cairns where the market tends to be busiest.
Based on Pricefinder statistics, there were 711 houses sold during spring 2019 for the Cairns Regional Council Area. Winter 2019 had 617 sales, autumn 2019 had 531 sales and summer 2019 achieved 413 house sales for an annual total of 2,272 sales. As a check, we have compared the current year to the same period in 2010 (ten years ago) which showed spring 543 sales, winter 511 sales, autumn 494 sales and summer 467 sales for an annual total of 2,015 sales. 2010 was flatter than 2019 in terms of more equal sale numbers throughout the year, although spring was the busiest season. Based was that nervous sellers were holding off listing, resulting in a shortage of available stock to meet the demand. It was common to see homes selling in well under four-week marketing campaigns with multiple offers presented and this characteristic is still present. On top of this, the rental market also began to tighten as people moved back to Mackay for employment. This saw increased pressure on rents which have been rising over the past three to six months. Vacancy rates currently sit well below two per cent and with a shortage of available rental properties there will continue to be pressure on the rental market.
With the backdrop of COVID-19 and its impact on many businesses and employment, the strength in the market feels a bit odd. I have just read a news article that notes calls to the National Debt Helpline are 20 per cent lower than normal and that Cash Converters has told their investors that demand for its products is soft. It appears that all of the stimulus measures put in place by the federal and state governments are doing their job. What happens when the stimulus stops?
There has been a spike in residential land sales with reports that most developed land supply has been absorbed. Home builders are busier than they have been for many years. Some developers are racing to bring more stock to the market to meet demand which may disappear when the HomeBuilder Grant ends on 31 December 2020. There is a risk we may end up with extra supply hitting the market at a time when demand is falling.
Speak with a Cairns Mortgage Broker today.
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