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Investment & Employment
In the past many people have thought that Cairns' economy was too heavily
reliant on being a tourist mecca, but tourism doesn't even make it into the
top five of its largest industries. It has added important
economic diversity over the last decade making it far more stable
and attractive for property investors. Education, heath, construction and
defence industries have all evolved.
The Navy is Cairns' biggest employer. The Federal Government has been
heavily investing by expanding the Naval Base and dramatically increasing
the port capacity to take larger boats. It can now accommodate ships up to
300mtrs long due to massive dredging and port expansions. Hundreds of extra
jobs are being created in marine manufacturing and maintenance from the $2
Billion defence force fleet upgrade.
Maritime industries play a huge part in the Cairns economy and the scale
for growth here is huge. From fishing to cruise cships and boat maintenance, Cairns is poised to be
one of the the major maritime regions in the Pacific.
Both James Cook and Central Queensland Universities are undergoing
continual expansion to attract more domestic and international students.
In July 2016, Cairns became the headquarters for a new Federal Government
department, administering the $1 Billion North Australia infrastructure
fund.
Both State and Federal funding has contributed to tenders being awarded to
build a massive export hub at the Cairns International Airport. Cairns was
chosen as the location ahead of Townsville and Toowoomba and other
Queensland cities due to it's ideal location. The facility will enable
larger volumes of exports to move more smoothly to Asia and the rest of the
world.
Covid aside, Cairns rate of job creation has exceeded state and national
averages by a wide margin. A massive pipeline of major projects approved and are underway
and will
create thousands of more new jobs in coming years.
To get an idea of the massive
amount of projects underway, please see the following report -
click here.
Population Growth
Population growth in Cairns has been above state and
national averages for over a decade and is set to continue. With such
massive exposure from tourism, a large source of the growth is from
overseas migration. With so much job growth and fantastic relative
affordability and lifestyle, population growth is expected to accelerate
post Covid.
The Property Market
Now let's look at the property market which has been flat for well
over a decade. This is largely due to an over-supply around 10 years
ago that took around three years to be absorbed. Then the APRA credit
restrictions kept a handbrake on the market, as it did around the
country.
Now, due to very little construction over the past five years, there
is a massive under-supply of homes at a time when demand is huge. So prices
have started to rise and local real estate agents are experiencing the best
market conditions in well over a decade. Monthly sales volumes are rising
and days on the market are decreasing which are indicators prices are set
to rise solidly.
Supply & Demand
Since 2010, only 450
to 700 new dwellings have been approved each year. With population growth
at just under 3,000 people annually, it’s easy to see where the undersupply
comes from. This low volume of new housing supply combined with
affordability and jobs driven demand is the perfect combination for
property price growth.
Rental Vacancy Rates
The vacancy rate sits well below 1% and local managing agents have
databases full of perspective tenants waiting for somewhere to rent. Many
homes are getting over 30 applications as soon as they are listed, with
renters offering higher than advertised rents to secure properties.
Low vacancy rates are
an indicator of low supply and price growth. (this is just a new line) not a
headline.
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