While the median house price of a property across Australia has dropped over the past 12 months, Cairns remains a standout with prices holding steady and strong demand remaining in most areas and property types.
What makes us so different? Well, for one we didn’t experience as stark a rise as other regions, (other regions that subsequently have far further to fall), but perhaps most importantly, the supply and demand equation is so heavily weighted to one side, there is an awful lot to keep us going.
What do I mean by this? Well, looking at a major property portal (which I won’t name), the number of properties advertised within the Cairns Greater Region today compared to pre-covid is less than a third. In other words, the average buyer had 3 times as many properties to consider and purchase in 2019 than they do today. The normalisation of COVID and the RBA’s rate rise spree has seen the number of buyers (and the purchasing power of buyers) in our market reduce, certainly. But with such a reduction in available stock, and housing being a need as much as (or more than) a want, well it translates to a continuation of the strong prices we have been seeing for the past 2 years now, albeit without the supercharged growth rates.
On the ground, owner occupiers still seem to be the most active group, though the number of upgraders has reduced somewhat as buyers no longer have the luxury of 2% interest rates to spur big jumps from one home to the next.
Interestingly, investors are starting to rear their heads more often, particularly those from outside of our market. The capital cities have taken up a lot of oxygen in the market with high capital growth rates over the past several years, but with interest rates higher and those markets now cooling, cash flow is becoming of greater concern again and our higher gross (and even net) returns are seeing renewed interest. The humble duplex is top of the list for many investors as the ability to secure two incomes against a single property (or block of land) becomes very attractive. They are not the cheap option they once were though – with modern takes on the theme now anywhere up to $800,000 or more.
The expiry of fixed interest loan terms might see more choice enter the market, but for now it still pays to be quick.