Given we are half way through December with precious little time left before the ties come off, the thongs go on and the diets go out the window, let’s take a moment to reflect on what we have seen over the past 12 months and what our 2020 could (potentially) look like for property in Cairns.
After starting with hopes and dreams, the first half of the year didn’t yield too many smiling (vendor) faces, with many buyers still struggling to meet new, stricter lending requirements (word to the wise – “Afterpay” is a dirty word when it comes to your mortgage application) and more than the usual number of contracts falling through on finance conditions despite record low (and lowering) interest rates available.
The Federal Election took the wind out of a lot of sails, with focus on investment reforms and changes to negative gearing putting the fear of Bill into investors and prospective buyers alike, delaying decision making, sometimes indefinitely. Once the election was passed we looked for confidence to come back in quickly but things continued to stumble for a time.
The 2018/19FY marked a turning point, with confidence starting to come back in the market and deals being done, supported by slightly kinder lending policies and sustained low interest rates. The Sydney and Melbourne markets are firing again, which is adding a more positive air to proceedings which had been pretty doom and gloom. While few records were broken with pricing, higher end transactions have continued and by one count, almost 40 homes have sold for $1M and above since January.
Here in Cairns, we have a powder keg of factors which have the potential to look very interesting in a short period of time, with much of it keyed into the current rental market. Vacancy rates (the number of available properties out of a total portfolio) are being quoted at 1% AND BELOW, showing an absolute lack of available housing stock and driving up rents across the market. Even as someone in the industry, I am astounded by some of the rents being achieved for property in Cairns. High rental prices, tight vacancy and cheap finance are generally not found in close proximity to affordable house pricing yet for the moment all four are present in our market. With relatively low volumes of new construction, something’s got to give and that “something” could see our 2020 look very different.