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“The Cairns economy continues to muddle along, with no real directional changes evident over the last month. Tourism and employment indicators remain positive, but job advertising, property and construction indicators are still lagging. Our ‘special topic’ this month highlights a slowly increasing population growth rate, which we predict to continue increasing over the next two years” – Rick Carr, Research Director, Herron Todd White Cairns.

Details of HTW’s March 2017 CairnsWatch report:


The Cairns median house price trend has eased slightly over the past six months, with its February 2017 reading of $401,200 down 0.7% on August 2016. The median unit price trend has also reduced, with its February 2017 reading of $218,000 down 3.7% on August 2016. Meanwhile the median land price trend ended up at $201,700 in February 2017, down 6.3% compared August 2016 largely due to reduced numbers of upper market land sales. N.B. The median property price is the actual sale price of the middle-priced property from the list of properties sold each month. Movements in median prices do not necessarily equate to movements in individual property values.

The real estate market has seen minimal change in overall property sale volumes over the latest twelve months, with the number of sales for the December quarter of 2016 up only mildly on the corresponding quarter of 2015, by 0.4% in trend terms. There was a 3.2% drop in the trend number of house sales over the period, offset by a 4.9% trend increase in unit sales and a 4.8% trend increase in land sales.

Rental vacancy trend rates have been reducing of late for units, but have been relatively steady for houses. Overall vacancies remain indicative of a tight rental supply. The latest trend rental vacancy rates for February 2017 stood at 1.8% for houses and 2.1% for units. The market vacancy trend overall stood at 1.9%.

Building approval figures reported for the Cairns urban area have fallen away significantly over the past four months and are down to a 17-year low. In trend terms the January 2017 figures are 57.8% below those recorded in January 2016.

Herron Todd White’s National Property Clock is prepared each month based on the local market perceptions of its Australia-wide network of offices. The Cairns market remains patchy, with some sectors showing rises but others seemingly in decline. Overall the market remains positioned at the ‘Rising Market’ phase of the cycle, but only just.

ABS headline figures for the Cairns Region (inclusive of Cairns, the Cassowary Coast, Douglas and the Tablelands) give an estimate of 113,000 persons employed during February 2017, compared to a headline estimate of 115,900 persons employed during January 2017. Despite the headline reduction, employment continues to grow when analysed in more reliable trend terms. Employment grew to reach a seasonally adjusted trend level of 117,500 persons employed in February 2017, up 8,100 since February 2016. N.B. The ABS Labour Force figures are estimates derived from a sample survey of only about 500 Cairns Region residents, and hence are subject to a potentially large margin of error. Neither the headline nor the trend estimates should be interpreted as precise values.

The Cairns Region’s notoriously volatile headline unemployment rate came in at 9.6% in February 2017, compared to 6.0% in January 2017 and a high of 11.0% in May 2016. When analysed in trend terms, the region’s unemployment rate has started increasing again, as previously discouraged jobseekers come back to look for work. We estimate a seasonally adjusted unemployment rate trend of 6.1% in February 2017, which is significantly below its February 2016 trend level of 8.0% and is back below the State average of 6.4%. N.B. To be counted as ‘unemployed’ in the ABS Labour Force survey you need to not have a job and be actively seeking work. People who do not have a job and are not actively seeking work are not counted as unemployed, they are regarded as ‘not in the labour force’.

The Cairns Region’s notoriously volatile headline unemployment rate came in at 9.6% in February 2017, compared to 6.0% in January 2017 and a high of 11.0% in May 2016. When analysed in trend terms, the region’s unemployment rate has started increasing again, as previously discouraged jobseekers come back to look for work. We estimate a seasonally adjusted unemployment rate trend of 6.1% in February 2017, which is significantly below its February 2016 trend level of 8.0% and is back below the State average of 6.4%. N.B. To be counted as ‘unemployed’ in the ABS Labour Force survey you need to not have a job and be actively seeking work. People who do not have a job and are not actively seeking work are not counted as unemployed, they are regarded as ‘not in the labour force’.

Cairns (defined as the urban area from the Goldsborough Valley through to Ellis Beach) experienced lower than expected population growth of 1.1% over the 12 months to 30 June 2016, with its official resident population reaching 158,499 as at that date. Cairns 2015-16 population increase was slightly above the 1.0% population growth recorded in Townsville but below the 1.4% growth rate observed in Queensland as a whole. We expect the Cairns population growth rate to pick up over the next two years as a result of its reinvigorating economy. Our population model predicts that Cairns’ population will grow by about 1.2% in the 12 months to 30 June 2017, followed by about 1.4% growth in the 12 months to 30 June 2018.

Passenger statistics at Cairns Airport during February 2017 were affected by the earlier Lunar New Year timing this year compared to last, as well as a shorter February this year compared to last (28 days instead of 29). Allowing for these factors, our trend calculations show that passenger numbers at the domestic terminal continue to increase, but their rate of annual growth in February 2017 slowed to 0.4%. Meanwhile passenger numbers at the international terminal reached an 8-year trend high during February 2017, but their rate of annual growth also slowed, to 1.7%. Passenger numbers overall grew in trend terms by 0.6% from February 2016 to February 2017. It appears that this year’s Lunar New Year growth impact was nowhere near as strong as it was in 2016.

This article is an extract from Smartline written Jason Thompson.

Property Friends is a specialist Property Investment Advocacy that has been operating for the last 13 years on the basis of 3 principles: Trust, Community & Progress. www.propertyfriends.com.au (03) 9758 5331

Uwe Jacobs Property Strategist

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