QLD FHB - Cairns vs Brisbane @ $550-600k

Hi there - just looking for general thoughts re: the above situation - I am a FHB originally from SEQ that will be working in Cairns for the next few years.

Option 1: buying an older established place in Cairns as PPOR (close to town), living in it for a few years before converting to a (hopefully) positively-geared IP to then hold onto for 5-10 years.

Option 2: buy a basic house in a middle-outer ring suburb in Brisbane as an IP, likely negatively-geared, again hold for 5-10 years.

I appreciate the extra costs of owning in FNQ (insurance, maintenance) can eat into what appear to be decent rental yields, and am wary that many suburbs in Cairns may have already experienced whatever growth they could reasonably expect over the medium term based on pre-COVID trends.

On the other hand, the Brisbane market is so heated right now, as a FHB it is hard to want to get involved when there is another option available that will not require me to make up the shortfall to meet repayments and allow me to get off the rental roundabout.

I feel as though Brisbane is the smarter long-term bet, but feel my lack of experience/confidence is making me lean towards Option 1 anyway.

Any thoughts would be appreciated, thanks

 

Whats so good about positively geared? Do you believe bris will have higher cg?

what will you do with it after holding for 5-10 years? Would cashflow or cg make you better off?

 

If I was looking at cairns and going to be living there for a few years , I’d be looking at the northern beaches palm cove / trinity beach .

They’re close enough to be commutable for work but I think , in particular given Covid , the demand for winter escapes for people living in Sydney / Melbourne is going to be an increasing thing .

We had a look around several years ago at the tail end of a port Douglas holiday and could see the potential .

We’re not in the position to buy there at the moment , and given we already have one holiday house ( port Stephen’s ) it’s hard to justify another .

I know a coupon of people who have 1 bedders where they spend around 4 months each winter .

I see a lot of potential . Maybe even more than I've been seeing in Tasmania ... and that turned out to be spot on

cliff

 

I like the northern beaches and I think they're good value if you look at the type of house, location, amenities, and resilience of Cairns market in the current conditions.

But I did the numbers and insurance + high rates are a killer. Minimum $4000 premium in non-flood or surge zones, and it will only go up

 

Look at the Upper part of Edge Hill or Whitfield. You’ll always get a good return there as an IP. Those suburbs would have a much better demographic then the outer suburbs of Brisbane that’s for sure.

 

i looked at townsville for ages (a good 2 years) and now after a few mates who live in cairns said cairns was a better place to buy overall and far less crime!!!

as i had a look around cairns over the last couple of weeks northern beaches are nice, palm cove is very snobbish, but beach was nice. have friends around trinity beach and kewarra beach nice areas

 

I've lived at Kewarra Beach and Whitfield; very different but both great suburbs though.

That said, Cairns hasn't experienced the massive reduction of supply and associated strong price growth that the QLD coast between Tweed Heads and Agnes Water has over the previous 18 months, however.

Why not?

Several key reasons I think: FNQLD is heavily dependent on international tourism and it's comparatively far from SEQLD for a road trip. So the local economy has taken a massive hit.

Southerners to a significant extent still view FNQLD as another planet (crocs, stingers, cyclones, fear of racism, ect). Just check out some of the comments on this forum by some precious little petals living in the capitals, lol.

And during previous investor-driven booms SEQLD would ramp up and 6-12 months later FNQLD would start firing...but this regional boom has predominantly been fuelled by people (owner occupiers) migrating from the capital's and larger regional hubs to the smaller regional cities/towns. So investors haven't been as active as owner occupiers in regional Australia.

Don't get me wrong: FNQLD is an absolutely amazing part of the world (reef, rainforests, pristine environment, cruisy lifestyle and eclectic blend of cultures).

So hopefully once Australia opens up to international tourism Cairns will start booming again.

 

Absolutely! Well said!!! Most southerners move there for the weather! Not realising most beaches you can't swim at! Hence why most people have pools lol

But from coming from NT to Cairns the weather change was beautiful!!!!

 

Got Townsville on the cards? We recently bought a house here with an amazing buyers agent. Coming from Darwin BTW. We considered Cairns but from an employment pov we went with Townsville. Money could go a bit further in Townsville too. Also it's a 3 hour drive to Cairns so that made us pretty happy too. Good luck with whatever you decide.

 

Most people who have a crack at FNQ have never been and don't understand the benefits of living there frankly. Same with the NT. But I'd rate FNQ ahead of the NT based on being a bit closer to the southern states.

 

The NT is awesome alot of employment opportunities!!! And remote living has its benefits! But alot of people can't do the wet season cause it's too hot!!!

 

Darwin is great but in truth very over valued for what you get. Cairns and Townsville present much better options for first home buyers imo with Townsy rank 1 for employment diversity.