“On the cusp of growth” – Optimistic predictions for the Cairns real estate market in 2019
Property affordability, a tight supply and favourable economic conditions will contribute to growth in the Cairns real estate market in 2019, according to local property agents.
That’s despite unsettling external influences, such as the tightening of lending requirements, which in 2018 stifled sales.
Agents say this year, stricter lending will be compounded by uncertainty surrounding the federal election and potential changes to negative gearing, capital gains tax and self-managed super fund legislation, which could impact investors.
“This will see a steady or slower first half which is traditional in the Cairns property cycle,” said One Stop Property’s Nickoli Obersky.
“But once the dust is settled, a busy second half will ensue off raw, pent-up demand and as the rules and processes are redefined and functional.”
However, Karl Latham from Elite Real Estate Services, has a different take on how the changes could impact the market.
“I think it will boost investor sales in the first quarter with savvy investors jumping in to get ahead of the change of rules due to the Grandfathering provisions,” he said.
Confidence in the construction industry will also have a positive influence, according to Mr Latham.
“We are hoping to hear the well-anticipated announcement of the start of construction at Cairns’ largest city development, NOVA City, which will have a substantial positive effect on confidence levels in the marketplace and create hundreds of jobs and major activity with the CBD,” he said.
One Stop Property’s Nickoli Obersky said that’s off the back of a slowdown in housing construction.
“The undeniable fact is there is no oversupply, in fact following a decade of well below new home and unit building starts, it is clearly a very tight market, evidenced by a 1.3% rental vacancy rate, and this will only get even tighter.”
“While there can be no doubt banks have reduced and tightened lending generally, people still need to buy and live somewhere, so many buyers have had to either re-appraise their budget and the home they buy or they are forced to continue renting for the moment,” he said.
As for the types of properties to watch in 2019, Elite’s Karl Latham said city fringe suburban homes in the $350,000 to $500,000 range are expected to sell well in 2019.
“The houses in these suburbs appeal to downsizers and also investors.
“Secondly, the northern beaches homes with pools between $500,000 and $650,000 offer strong appeal to the southern buyers relocating from Adelaide, Melbourne and Sydney,” he said.
“Investors are still attracted to the full duplex that offer dual income without the body corp fees and also rent out very well.”
Nicholas Slatyer from Belle Property Cairns, said sales of the more expensive properties should also remain strong.
“We have seen the top end of the market perform well, which continues the pattern that began a couple of years ago,” he said.
“We’ve got low unemployment, a rejuvenated Cairns city and a strong tourism environment, all of which will help maintain a slow and steady upward trend for our property market.
"There will be no boom or bust."
So far this year, sales numbers have been slow, which is traditional for the holiday period, however Mr Latham said enquiries from home buyers and investors have increased dramatically since early January.
“No record-breaking numbers, however pretty strong considering the early start and we all hope this continues throughout 2019 as I think Cairns is on the cusp of growth.”