The month in review: Cairns
By Herron Todd White
Cairns ended 2014 in a stronger economic position than at the end of 2013. However the pace of its economic recovery slowed during the course of the year, affected by slower growth in tourism in 2014 compared to the previous year and continuing weakness in the labour market. Job creation in particular remains soft and unemployment higher than the state average. Even though the mood remains positive we expect relatively subdued economic growth conditions to prevail during 2015. Commencement of the $400 million Nova 8 residential and commercial towers in the CBD, with 1,000 on-site construction jobs, will provide a much needed contribution during the year.
House prices in Cairns have been creeping up over the last three years and our expectation is for further price acceleration during 2015 as the economy improves and the amount of property for sale continues to reduce. Potential vendors are already hanging off to wait and see what happens to prices over the next twelve months and this is compounding the reduction in the amount of property available on the market. The tight rental market and low rates of new construction will maintain pressure in the market and provide further impetus to market activity.
Interest rates aren’t a big determinant in the Cairns market. Though lower interest rates help, the prime influences on people’s buying confidence in Cairns are the state of the economy, affordability and job security. These will all contribute to drive property in Cairns over the next 12 months.