Cairns

The Smartline Report – December Edition

The month in review: Cairns

By Herron Todd White
December 2016

Over the past three to four years, Cairns has been progressively turning around from the tough economic conditions it experienced in the aftermath of the Global Financial Crisis. The tourism industry in particular has been experiencing significantly improved tourist seasons during the past four years, particularly from the developing Chinese market, and accelerated considerably during 2016. However the overall economy cannot yet be regarded as buoyant, with the employment market still soft and the unemployment rate higher than the state average.

The lack of jobs growth and job security in the local economy has led to a flat spot in residential property demand and a softening of market confidence during 2016. The level of residential sales activity has cooled and the previous rising market has eased back to more of a balanced market. The market is best described as reasonably healthy with steady demand for appropriately priced residential property.

Price levels for houses during 2016 have been typically stable. Unit prices typically remain shy of the 2009 peak levels due to the ongoing effects of buyer aversion to increased strata building insurance costs and tightening of lending practices to investors.

Demand for vacant land has slowed and the strongly rising prices experienced throughout 2014 and early 2015 abated during 2016.

Pressures in the rental market increased during 2016 as a result of tighter rental vacancy rates. The trend rental vacancy rates for October 2016 stood at 1.9% for houses and 2.3% for units and the market vacancy trend overall at 2.1%. Low rental vacancy rates have resulted in mildly increasing rents, with the weighted average median rent for a house increasing over the past 12 months from $385 to $390 per week and for a unit from $275 to $285 per week.

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Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2016. Australian Credit Licence Number 385325

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