Bright year ahead for 2017 real estate market in Cairns
With one of the big four banks predicting house prices to rise at a higher rate than it previously thought in 2017, the Cairns market is set to be one of Queensland's best this year.
The National Australia Bank’s decision to lift its 2017 property price forecast is in line with positive expectations in the Cairns real estate market, local real estate agents say.
NAB has revised its initial forecast and now expects prices of both houses and units to grow at a much higher rate this year.
The bank lifted its prediction for houses by three percentage points to 3.4 percent, up from its original 0.4 percent growth forecast.
Units are tipped for more modest growth of 0.8 percent, a positive turnaround from NAB’s original forecast of negative growth of -1.6 percent.
An NAB economist said “sold market sentiment” contained in the latest NAB property survey and a “surprisingly strong” response to lower interest rates sparked the revision.
The bank is also expecting more rate cuts this year.
One Stop Property’s Nickoli Obersky welcomed the revised forecast and said it matched his view of the Cairns market.
"You can confidently say the only positive promise in the real estate market in Queensland is in the South East corner and Cairns,” Mr Obersky said.
"Both catchments share the fundamentals that drive opportunity and support positive growth, including population growth, employment and affordability.
"Given that supply and demand forces drive housing prices and building costs, it’s important to note that Cairns has had no oversupply of new homes and units compared to many other regional cities in Australia and places like Perth or Darwin.
“Simply, with record low new stocks of built homes and reduced new land sales show a ‘below need’ supply.
“There is pent-up demand especially with very well educated buyers and desired properties will be the first to benefit with this price rise."
Mr Obersky said the first month of 2017 provided a positive start to year for the local property market.
“Everyone is now back at work, general business activity is gaining momentum even with this sluggish tropical humidity,” he said.
“We have not seen any reduced building works activity this year with the delayed onset of the Wet as compared to previous years and we are experiencing engaged enquiry and positive new business activity.
“When comparing the current workbook of contracts in progress we have far more than that of the last few years, so clearly the local business environment is stronger and consistently building.”