Everything you need to know about the Cairns economy right now
While tourism and the jobs market both came "off the boil" in Cairns last month, predictions for the start of 2018 are that economic prospects are strong with new flights boosting employment and tourism growth.
That’s the verdict in the latest CairnsWatch report by Herron Todd White.
While the December report compiled by analyst Rick Carr noted the Cairns economy’s significant advances in 2017, his assessment found a wavering employment market towards the end of the year despite a spike in job advertising rates.
Property, Mr Carr adds, is very much in a ‘steady state’ position in Cairns, though real estate sales were described as "dead flat" for the September quarter.
On the jobs front there has been a massive upward trend in job advertisements in Cairns with a 16.9 per cent increase in the 12 months from November 2016 to November 2017.
Mr Carr says the trend in the number of jobs being advertised on employment websites for the Cairns and Far North region has built strongly over the last 12 months, and continues to bode well for future job creation.
There was also an encouraging 1.6 per cent increase in domestic airport passengers, the unemployment rate remained steady at 5.9 per cent and there was a 3.6 per cent increase in jobs growth. The latter was despite a reversal last year of the strong employment trend rebound experienced in Cairns from June 2015 to June 2017.
“Trended employment figures for the Cairns Region (inclusive of Cairns, the Cassowary Coast, Douglas and the Tablelands) estimate that there were 116,500 persons employed during November 2017, down from a revised trend estimate of 116,900 persons employed during October 2017.”
However Mr Carr warned the ABS Labour Force figures can be unreliable, with estimates derived from a sample survey of only about 500 Cairns Region residents.
While 2016 saw a significant reduction in the region’s unemployment rate, these declines have steadied to a slightly reversed position during 2017 as a result of more people joining the search for work. At 5.9% the Cairns Region’s trended unemployment rate is again broadly in line with the State average of 5.8 per cent for November 2017.
AIRPORT NUMBERS TO RALLY
New flights, dedicated services and increasing flight frequencies are all expected to rally decreasing international passenger numbers at Cairns Airport.
“Passenger number trends at Cairns Airport have tapered off in recent months at both the domestic and international terminals, moderating the year-on-year trend growth rates,” Mr Carr says.
“Over the twelve months to November 2017, passenger numbers have increased in trend terms by 1.0%, consisting of a 1.6% increase at the domestic terminal, but a 2.6% decrease at the international.”
The report noted that the international terminal is expected to benefit from Cathay Pacific moving to ‘dedicated’ services between Cairns and Hong Kong, Silk Air increasing flight frequency to/from Singapore, China Southern and Hainan Airlines launching services to/from China, and Jin Air recommencing seasonal flights to/from Korea.
TIGHT RENTAL MARKET
The already stressed rental vacancy rates in Cairns are continuing to tighten according to the CairnsWatch report.
“The latest trend rental vacancy rates for November 2017 stood at 1.6% for houses, 1.8% for units and 1.7% overall.
“Coupled with the low level of new rental supply being created due to relatively low levels of new housing construction and reduced levels of investor housing activity, rental market conditions are expected to stay tight and/or stressed for some time.”
‘DEAD FLAT’ SALES
‘Dead flat’ is the description given to real estate sale numbers in the latest quarter while real estate prices overall are seen to be ‘static’.
Mr Carr says their latest analysis shows that median property prices continue to drift
slightly down for houses, but are moving slightly upwards for land and remaining steady for units.
“However even though price movements for individual properties can be mixed, our overall view is that prices are static. The latest trend median prices for properties sold in the month of November 2017 came in at $406,000 for a house, $215,000 for a unit, and $216,000 for a block of land.”
The trend in sale numbers continues the flat sales market conditions that have been evident since the start of 2016.
“The trend number of sales taking place in the September quarter of 2017 totalled 1,063, around 10% below the levels observed in 2014-15. A small increase in the trend number of houses sold during the latest quarter was accompanied by little change in the trend number of units sold.
“However land sales weakened from the first home buyer induced flurry that took place in the preceding quarter.”
BUILDING APPROVALS LOW
Building approval figures for the Cairns urban area have also seen to have ‘flattened’ despite a progressive recovery during 2017 from their late 2016 slump.