QLD Cairns

Discussion in 'Where to Buy' started by Azazel, 19th Aug, 2015.

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  1. Darwin55

    Darwin55 Well-Known Member

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    I hope so.
     
  2. Greyghost

    Greyghost Well-Known Member

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    Rose tinted glasses all round in this thread!
     
  3. HUGH72

    HUGH72 Well-Known Member

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    How so? It's called Property Chat last time I checked isn't it?
    I've just looked back through the thread. A little optimism, recent announcements and mostly talk about insurance.
    Surely we don't have to keep the conversation on Sydney, Melbourne and Brisbane.
     
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  4. strongy1986

    strongy1986 Well-Known Member

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    Ghost
    Surely your smart enough to realise that property markets operate in.cycles?
    Sydney didnt grow between 2002 and 2009
    Melbourne went backwards between 2010.and 2013.
    Plenty of people.have doubled their money just as quick.in a regional. Pick your timing
    A lot of capital city bias on the forum at the moment which tells me.its a good time to look at regionals...
    Last time on somersoft it was the regionals.were all the rage whilst capitals were rock bottom
     
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  5. Greyghost

    Greyghost Well-Known Member

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    Yep i have heard a thing or 2 about cycles. ;)
     
  6. Greyghost

    Greyghost Well-Known Member

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    Optimism sure. Talk outside of the major cities sure.
    But this thread goes way back to when Jen Jen was flogging it, posting every news article and stat on Cairns, almost hyping the area.

    My folks own in Palm cove and another house close to Cairns cbd, so I have some knowledge on the area. On a side note Birch was buying units there in 08 I believe, suppposedly under MV etc etc, he didn't disclose the address, but I've found the unit(s) next door for sale at the same price as back then.

    I'm all for a revival of Cairns and wish for its prosperity, but it is a regional town, with significant economic factors that need to be considered (even more so than capital cities), so besides just finding out what additional strata and insurance costs are regarding your cash flow, I feel investing in Cairns has more inherent risks. There is also a lot of land available, so the news may print as many stories about jobs in Cairns but there is no real supply problem.

    My scepticism is not tall poppy syndrome or for the love of larger CBD cities, but just general concern about its ability to perform despite all of the media articles and budget promises.

    I hope I am proven wrong
     
  7. strongy1986

    strongy1986 Well-Known Member

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    Theres stuff all well located land in cairns and almost none in the northern beach areas like Palm Cove
    Yeah there might be a heap Of land back of Edmonton but thats getting pretty far out.
    Melbourne has lots of land availability too but that hasnt affected the better located areas.

    I know you think the cycles bust but if so then why confidence in sydney/ melbourne? Surely theres a point that without wage growth the prices cant continue to rise?

    Newcastle has had amazing growth . Mostly a result of people from Sydney deciding they can no longer afford Sydney and want a better lifestyle.
    So Newcastle was the easy option being close to Sydney but i think this sort of domestic migration shift will become more common for young middle income earners.
    I also reckon any nice spot on the coast is gold. There arnt as many spots as people think as its 95% national park/ uninhabitable. In the future when our population is 40 million they will all have to live somewhere and you can guarantee a place like Cairns will receive a little more than their fair share.
    Have a look at cairns on the satelite map.
    Whats the population? 180,000? Now imagine it with double that population.

    Btw i have no vested interest in cairns
     
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  8. HUGH72

    HUGH72 Well-Known Member

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    Unfortunately Jen Jen doesn't post very much anymore after criticism. I liked reading her content.

    I don't think anyone who knows the area well is looking through rose coloured glasses, a deep recession during the GFC has taken a while to recover from.
    Prices are flat, vacancy rates are sub 2% for houses and yields are high. Gouging from insurance companies has taken it's toll.
    Inspite of all the problems Cairns consistently has population growth greater than anywhere else in Qld outside of the southeast.

    Other than the large new estate at Mount Peter south of Edmonton which is almost in Gordonvale there actually isn't that much usable land. The endless cane fields are mostly on flood plains. With over 3 metres of annual rainfall in some locations I doubt if much of this land will ever be become new estates.

    I wish more people would actually post about what is or isn't happening in regional australia. I want to know what is happening in Townsville, Albury, Toowoomba, Bathurust, Orange, Tamworth and Ballarat etc etc... Many of these markets might currently be on the nose but their time will come again. The general waffle on some of the other threads currently adds little.
     
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  9. Kinnon

    Kinnon Well-Known Member

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    Well said, Hugh.

    I attend open homes most Saturdays and chat to a lot of different people, and anecdotally speaking, the confidence in the Cairns market seems to be growing but it's more so the out of towners as opposed to the locals who have a long memory and are still feeling the hurt of the GFC. There's a lot of cash buyers who have cashed in down south and looking for their tree change. In the low - mid price range properties there's also investors that are flying up for the week or weekend to go property shopping. The properties that seem to get the most activity at the open homes are the ones that need some TLC with people wanting to emulate what they see on the 9Life channel....

    In my neck of the woods (the Beaches) even some of the higher-end properties ($800k+) are starting to move. Two particular ones comes to mind where I thought they were well overpriced ended up selling pretty quickly for more than I thought they would go for.

    The Mt Peters estate does scare me a bit due to potential oversupply problems but I think that will be contained to the South of the CBD.

    I also know of a couple of properties that Birch owns here and they're tiny little studio units lucky to be 30sqm in buildings that don't attract the most desirable of tenants. They'd be a dud investment no matter the town you're buying them in. But yes, I do think units are dragging behind free standing dwellings at the moment and would not incorporate them into a long term hold strategy.

    As you drive into town you see cranes which is always a good sign and a lot of new and redevelopment of areas too such as the Munro Martin Parklands, the new outdoor area near the beach volleyball courts, the massive refurb of a couple of major hotels, the Aquarium, Shields st works, infrastructure works etc plus lots of other little things.

    Cairns just needs to lose the stigma of being a one trick tourism pony. I'm stealing this data from a post I wrote on SS a while ago as I don't have the time at the moment to gather the stats again, but I would hazard a guess at it not having changed all that much:

    The Gross Regional Product of Cairns for 2013-2014 was $14.355b. Of that ~$14b the direct tourism contribution was $1.388b and the flow on in secondary services is $1.846b. So that is roughly 22% of the economy that is made up of direct and indirect tourism.

    Top contributors to the $14.55b was mining (10%), construction (9%), transport (8%), ownership of dwellings (10%), agriculture, forestry & fishing (7%), and admin support services (8%). The rest of the makeup belongs to other industry groups such as education, financial services, communications, defence, health & community etc.

    Total 2013-2014 workforce was approx 130,000 with the top industry groups being health and community services (12%), retail (11%), admin and support (10%), accom & drink (9%), construction (9%) and education and training (8%).


    I generally look at life as a whole with rose coloured glasses :D But I don't let that cloud my objective judgement. I think Cairns is and will be going places and will be soon putting my money where my mouth is. The above is just my 2c from my observations over time.
     
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  10. JenJen

    JenJen Well-Known Member

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    Hi Hugh

    Thank you! I’ve actually been too busy to keep up lately, and I’m only scanning PropertyChat now that we’re receiving weekly email updates of New Posts (Thanks, Simon!).

    It’s good to read the posts of people like yourself and a few others who have a detailed, historical understanding of the region, and are happy to back it up with solid evidence and examples. I agree with Kinnon that the thing about the Cairns market is that it takes time for many (locals and investors) to move beyond prior understandings of the region and assumptions.

    I also agree with your observations about Cairns. In terms of land, other than the Southern corridor, I believe that there is comparatively little land left that is suitable for development. For those who have researched the area and have looked at council flood, landslide, and environment protection overlays, among other things, this is more apparent. In my view, if there was much land left to develop in the Northern suburbs (beaches), people would be doing that as a priority, rather than developing down to Edmonton and beyond. Of the land that is left in the Northern section, it is being carved up into tiny blocks of land to accommodate the growth in James Cook University students. This is very different stock to what the majority of owner-occupiers and investors are looking for. As per the image below, the actual land use and land release forecast can be accessed via Qld Globe.

    Cairns Land Release.png

    Yes, the Cairns market has definitely softened over the past year, but overall, according to the Herron Todd White property clock, it’s still classified as rising (see below), compared to Sydney, for example. As Strongy and Kinnon mentioned, as property prices peak in the Capitals, we tend to see more cashed up buyers looking to the regions. This was the same case in the previous property market cycle, as the money generally flowed up the coast. I see this first hand, as the vast majority of my clients are from Sydney cashing in on its growth and retiring to Cairns, or buying an investment in Cairns now for their future retirement. Personally, I think we’re going to see much more of this as the Melbourne market peaks, and the retirees and their money flow north looking for better weather and an easy lifestyle.

    HTW Property Clock April 2016.png

    As for Townsville, it is still at the bottom of the market but, according to my rose-coloured glasses, I think it finally looks set for a good run, with positive property data starting to emerge, and many locals and investors seeing it as a good time to get in. According to PWC (see attached), business confidence is definitely on the up. On the ground, and in areas that are highly sought after, there are plenty of people attending open inspections (40 groups through one open house seems like plenty to me, but maybe not for others more accustomed to the southern markets), including those flying up from down south. Yes, vacancy rates are shocking, insurance changes are only just starting to trickle through, and crime is bad. However, in my view, there’s a lot going on and in the pipeline for Townsville.

    As you are interested in keeping tabs on the regions, I’ve put in a snapshot of some of what I’ve been tracking via the Townsville news over the last few months (Sorry, I haven’t put the links in as they are subscription only, but if you do a search for them you can access the full articles).

    Also, I know it’s lag data, but you might find the regional section of the REIQ Queensland Market Monitor of interest. If you PM me, I’m happy to share.

    Thanks again for your interest.

    Cheers

    Jen


    Townsville Bulletin (2017)

    · Townsville City Deal’s implementation plan
    · Townsville’s $250 million stadium project
    · BHP Billiton to spend $270m on link project at Queensland mine creating 400 construction jobs
    · Queensland jobs: Regions lead way for growth
    · Emergency treatment at Mater Hospital
    · Lancini group well under way on $10m City Point redevelopment
    · Diamantina Minerals Province minerals discovery
    · $4.7 billion development team puts Townsville first
    · Upgrade to Townsville port provides jobs for local construction workers
    · Sky’s the limit for PNG flight connection with Townsville
    · Sydney investor buys CQU campus in Townsville CBD for $12.8m
    · Collinsville on verge of becoming Australia’s solar farming capital
    · Jenny Hill FIFO jobs in Townsville
    · Townsville Mayor has Adani meetings in India
    · Townsville university campus expansion on track
    · Tigerair will land in Townsville from June 22, 2017
    · Cooperative Research Centre for developing Northern Australia gears up in Townsville
    · Lower insurance has halved body corporate fees on units
    · Financial support builds for large-scale solar farm in Townsville with major purchase agreement sorted
    · Energy Australia secures future of $225m Ross River solar farm
    · Airport flies to new level
    · BHP Billiton turns to Townsville to fill hundreds of FIFO positions in Bowen Basin mines
    · Projects to drive city’s jobs boom
    · Future brighter for jobs in the Townsville region
     

    Attached Files:

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  11. strongy1986

    strongy1986 Well-Known Member

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    I reckon Townsville is off the bottom.

    No bargains to be had in North Ward anymore. Maybe its just due to low stock but late last year there were some houses that were only $300 odd.
    Vacancy is still bad though. So definitely not smooth sailing.

    My thinking when we invested there was that Townsville will see a similar boom to Darwin in the not too distant future.
    Townsville has a lot of tricks up its sleeve with or without the Adani mine.

    Ill give it 12 months and instead of everyone on the forum ridiculing the Townsville/ Cairns markets there will be strong interest as every other town in AUS of similiar size has moved out of that investment sweet spot - less than 4.5-5% yield

    I think Townsville has much more going for it economically than Cairns does.
    Cairns main strong point is the retirement population and its land constraints. There will come a point where they cant cram any more in up there and prices will bang
     
    Last edited: 10th May, 2017
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  12. tommo c

    tommo c Well-Known Member

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    Lets hope so!

    I think the land scarcity closer to the water is one of Cairns' bigger attractions, IF, they win a few big contracts, and get some more government money spent up there. Then, hopefully those premium locations will be the first to rise.
     
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  13. strongy1986

    strongy1986 Well-Known Member

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    Pictures demonstrating land scarcity

    [​IMG]
    Cairns
    [​IMG]
    Townsville

    [​IMG]
    Darwin
    Not hard to see why it boomed
     
  14. Darwin55

    Darwin55 Well-Known Member

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    True, but places 60km from Darwin city boomed
     
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  15. dan2101

    dan2101 Well-Known Member

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    Currently travelling through nth Qld. Loved cairns and port Douglass and Townsville looks like a great place to live!

    Anyone got any thoughts on Rockhampton? Been horrible lately any signs of life?
     
  16. JenJen

    JenJen Well-Known Member

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    Hi Dan

    In my view, if you like the tropical weather, you can't beat the North Queensland region. Cairns is wet tropics, and does rain a LOT, which is why I prefer Townsville (dry tropics) weather. Over 300 days of sunshine a year, but drought and water supply are issues.

    With regards to Rocky, I'm sorry to say that it's still suffering from the Gladstone fallout. Gladstone and Gracemere oversupply took a big toll on rents. According to SQM research, over-supply is coming down gradually, but Rocky is still very much at the bottom. I'm hoping that it has bottomed out and ready for recovery now, and that the Singapore soldiers, beef export industry, mining resurgence and southern property markets peaking will give it the boost it needs. Also, the council is doing quite a bit to re-invigorate the CBD.

    Cheers

    Jen
     
  17. dan2101

    dan2101 Well-Known Member

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    How good is the view from the top of that hill in Townsville @JenJen . Amazing!


    Thanks heaps for the info. Gracemere has copped a flogging! Really hoping its bottomed out as the last year has been horrendous. Hoping that Adani has some positive effect and possibly rocky is named as one of the fly in fly out hubs. It can't get worse surely! Wish I had've purchase in Townsville instead.

    Dan
     
  18. HUGH72

    HUGH72 Well-Known Member

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  19. highlighter

    highlighter Well-Known Member

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    Out of curiosity for a friend about to list, how is the Cairns market doing? He'll be listing in Holloway's Beach, renovated place of 3 or 4 bedrooms. Not sure what he's asking but he's moving so needs to sell in about 3 months. Mainly wondering as I'm a teensy bit nervous for the guy. There seems to be a lot on the market in that area, with some asking reduced prices. Are things picking up?
     
  20. HUGH72

    HUGH72 Well-Known Member

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    Flat market. Rents and therefore yields fairly strong for houses. There is always a bit of stock on the market as a section of the population is highly transient.

    Holloway's beach:

    Not a suburb that tends to appeal much to locals. Under the flight path, mosquitoes and close to the Barron River so the beach isn't particularly nice. Insurance premiums for anything close to the water are likely to be high so investors would most likely look further north towards Trinity Beach/Park and west towards more appealing suburbs.

    If it's priced correctly it will more though, the local market is highly price sensitive.

    Just my purely subjective opinion.
     
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