Counter-cyclical Cairns in a positive position in 2016: HTW property clock
Cairns remains a rising market, following a year of continued growth and consolidation as a result of its steadily improving economy and the market being positioned in the rising market phase of the property cycle throughout the year, say Herron Todd White in their latest property clock.
Valuation firm Herron Todd White’s property clock is a simple broad brush means to suggest where property markets are as at March 2016 and what direction prices are moving in.
Cairns is typically counter-cyclical to the national market, according to HTW. Whenever the national economy slows and the Australian dollar falls, the Cairns tourism industry becomes more competitive, the local economy improves and the real estate market revitalises.
There is good demand for most residential property types and although sales growth has eased, prices continue to rise.
HTW expects 2016 sales volumes to see a slow but steady increase and flow through to price rises being maintained typically at around the 5% mark.
There will be on-going demand for rental property which, given the relatively slow rate of new housing development and tighter lending conditions to investors, will keep the supply of rental property moderately tight and maintain a slight upward pressure on rents.
Cairns remains in a positive position at present compared to the downward adjustments taking place in the major capitals.
The median price of units in the city was $370,000 at the end of 2015, according to RP Data. There was no comparable data for houses.
As an example of recently sold units around the median, a two-bedroom dwelling at 161-163 Esplanade sold for $388,000, according to www.realestateview.com.au.
HTW noted with new construction and development remaining quiet in Cairns, gentrification is not an especially strong force in the overall development landscape.
The inner suburbs of Cairns North and Parramatta Park have traditionally been the popular gentrification areas of Cairns, with some extension into suburbs such as Edge Hill, Manunda and Westcourt.
It noted the slowdown in new unit development in Cairns.
There was something like 980 new units built on greenfield or recycled sites in Cairns North over the period from 2000 to 2008.
"However there’s been absolutely nothing since."
Parramatta Park has experienced significant gentrification over the years typically based on renovation and modernisation of its older style Queenslander dwellings. This also reflects the character precincts in place in much of Parramatta Park as opposed to the more blank canvas development approach that has taken place in Cairns North.
"By way of example, renovated Queenslanders in Parramatta Park currently command a market range typically of $450,000 to $600,000, compared to a typical market range of $350,000 to $450,000 for unrenovated dwellings."
