Positive Signs Continue

expect to see more changes as QLD opens up

Another week gone by and another week of strong activity in the market which continues to bode well for Cairns. Interest rates have been cut AGAIN, making it even cheaper to buy, with borrowing capacity increased as well (albeit only marginally at this point).

The rental market remains as tight as we have seen in recent memory, with rents continuing to go up accordingly. This increase in the cost of renting is also putting pressure on the housing market as the balance between the cost of a mortgage vs paying rent continues to tip in the favour of buying – in many cases now you could own a home and pay it off for less than you would be paying to rent the equivalent property, though job security and a decent deposit are still hurdles for many.

Housing is overachieving in comparison to the market as a whole, with detached homes on big blocks absolutely fetching a premium, particularly those in good condition with nothing to do. The $300,000 - $600,000 range remains hotly contested – I haven’t had a single home last more than a week on the market without an offer in the past 6 months outside of an auction campaign.

Speaking with other agents (believe it or not, we DO talk to each other!) the consensus seems to be local owner occupiers are the real drivers in the market, which again is encouraging. As much as investors are very much a big part of our dynamic here in Cairns, owner occupiers tend to offer more stability and commitment within the market, promoting more sustainable growth compared to investors that can come in and out of a market, as we saw post GFC. That being said, given the high rents being achieved and cheap money, its surprising we aren’t seeing more investors coming through.  

Southern buyers are still a small part of the equation, but growing as borders loosen and they start looking North. We may be pleasantly surprised by the activity that runs through to Christmas, though I would still encourage serious sellers to be on market in November to make the most of it.

Good land is becoming increasingly rare, with transaction volumes falling as availability things out. Units are starting to pick up, though not at the same pace – expect to see changes as QLD opens up.