Chapter 1: What is the current state of the Cairns property market?
It's the Real Estate Podcast, brought to you by ANZ Home Loans for financial well-beings. And welcome to another episode of the Real Estate Podcast, available on iHeartRadio every morning and on Spotify and Apple and wherever you get your podcasts from. Monday morning is behind us. We are into a Tuesday, the 13th day for September for 2022.
And coming up in just a moment, our road trip is pulling into Cairns. And we're going to be speaking with Kyle about the Cairns property market. Is it a location that you have thought about in the past, about relocating, saving some money on property? Well, plenty of people have done it, and we'll catch up with Kyle in just a moment. Talking of moving to a different location to save money...
I mean, this is at the other end of the spectrum. You might have read a couple of days ago a young couple who paid $99.5 million for a few different sections at a site in Port Piper in Sydney. And of course, the $99.5 million is primarily for the land because they plan to build a mansion on it which is likely to be Australia's most expensive property after completion.
I mean, this is excessive expenditure, excessive indulgence and it's an excessive statement to make. You know, there was a time when spending $10 million on a property was excessive. But now it seems like the sky is the limit. The stamp duty alone on this was $6.77 million. And by my calculations, you can build a pretty nice home for that.
It's your weekday real estate breakfast with news, interviews and predictions every morning on The Real Estate Podcast. All right, if you're celebrating a birthday today for the 13th day of September, have a great Tuesday. You share it with Thomas Muller, the German footballer. He is celebrating today. He was born back in 1989. And Shane Warne, now he would have been turning 53 today.
Unfortunately, of course, he passed away on the 4th of March. And a quick calculation, that is over six months ago. Where has that time gone? It's your real estate podcast for breakfast. It's the main centre forecast with PRD, selling smarter every day. And let's check on your weather on this Tuesday morning in Sydney.
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Chapter 2: How have median house prices changed in Cairns recently?
Good morning to you. Expecting one or two showers today. Your high of 17 degrees. Might be wet too in Melbourne with a possible shower. 14 degrees is your forecast top. It's going to be fine and sunny in Brisbane with 25 degrees and in Perth showers with a possible storm today and your high of 18 degrees.
We talk with leading property commentators with analysis, predictions, forecasts and what's trending every morning from 6.30. Well, last week we started our road trip and headed for the desirability of living in the warmer Queensland countryside.
And we started off in Harvey Bay on the Fraser Coast there, about 300km north of Brisbane, where Scott told us that the climate in Harvey Bay is one of the best in the country. And from Harvey Bay, we then headed further north to Rockhampton. And the prices like Harvey Bay are significantly cheaper than a Brisbane and lots of great value.
And then we drove further north to Mackay and spoke to Danielle and Mackay is certainly turning out to be a popular destination as well. And we are back on the road. This time we have arrived in Cairns and we are talking to Kyle Olofsson from Explore Property.
Chapter 3: Who is moving to Cairns and why?
So a very good morning to you, Kyle. Welcome to The Real Estate Breakfast. Thanks for having me. Good morning to you too, Craig. Great to have you on. Now, spring is in the air. We've got the warmer temperatures because we're in Cairns. How are you finding the change of the season with your market there? Our market, well, our city in general shines this time of year.
And it's just a fantastic vibe out there as you move around. We've certainly seen the return of tourists domestically. And we're very optimistic that our market will continue to show signs of strength as we lead into Christmas.
We have been talking, as I mentioned over the last week, about the likes of a Harvey Bay, a Rockhampton, a Mackay, and the price differences, the more value for money for first home buyers in particular. Just how much in that area of first home buyers have you seen make the move to Cairns? There's certainly a portion of our purchases from the southern cities that are first home buyers.
Chapter 4: What investment opportunities exist in the Cairns property market?
But I'd probably say that we're more so seeing your retirees move up into our region or those who might be their second or their third home looking for a lifestyle change. Cairns being a tourism town, it's always attractive. families or couples who have probably at some point holidayed here in Cairns or Port Douglas. And they probably always said Cairns would be just a wonderful place to live.
And at some point they've bitten the bullet and done it or they've retired and they thought, well, now's a better time than any. So the first home buyers, yeah, a small portion, but definitely a much larger portion of Southern buyers are in that older demographic.
Okay, so let's talk about the median house prices because someone listening to the podcast this morning in Perth or Canberra or in Manly in New South Wales or Geelong in Victoria, they won't have any idea at all about what the median house price and where that sits for Ken. So let's look at maybe a block of land and a three-bedroom house. What sort of money in terms of median house price?
Yeah, look, you'd be spending in the $400,000 to get an entry-level three-bedroom home on probably the southern corridor of Cairns. It's really probably difficult to find anything with a three in front of it in this market. Our median house price in general sits at $540,000, which is about 10% up on 12 months ago.
So, yeah, entry-level buying is certainly a bit harder than what it was 12 to 24 months ago. But there's still very good value in and around Cairns. If you get in on the ground, you certainly have a look.
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Chapter 5: How are interest rates affecting the Cairns real estate market?
Now, what about investors there, Kyle? Has Cairns been attracting investors from other states? It has. Yeah, it's been fantastic, actually, to see buyers coming back into our region that are investing from, you know, typically from Brisbane, Sydney, Melbourne. Those are probably the key suburbs. And look, certainly sometimes Perth and South Australia. But yeah, they're coming back into Cairns.
They're looking for value. They're chasing good returns. And I've always believed that Cairns is a a city which probably offers returns from a numbers perspective better than anywhere else in the country, probably with the exception of some mining towns.
You can get an investment property in Cairns on a net return of anywhere between 4% to 7% if you get in on the ground and you do your homework and you buy well. So let's have a look at the last three months which will take in all of the rate rise hikes and the way that people have had to adapt. So what's been happening?
What are some of those conversations in Cairns around that and the positivity I guess of moving forward?
Chapter 6: What industries are driving growth in Cairns?
Look, there's definitely been conversations, that's for sure. Has it dampened our market? No. I think last month alone in our office, we had one of the best months we've ever had in our four years of our sales business operating.
I believe that the, and maybe I'm being optimistic, but the rising interest rates might have a positive effect in somewhat in our region, particularly as first home buyers or people who want to relocate and want to look for better value.
but also for investors and if you're an investor in one of the capital cities and you want to look for value then yeah I think our region's just fantastic for that particularly with great returns to counter those increases in interest rates. And what are some of the attractions Kyle some of those attraction levers that want to make people move into Cairns?
yeah sure well look if you've ever holidayed in Cairns or Port Douglas and particularly during the winter months or the spring months you'd know what they are you know it's just a wonderful city to be around and it's warm we have nice long days we just have so much to experience but from a an industry and the key industry driver construction's certainly a key industry for us and that's pumping along very very well it's difficult to get a builder at the moment in Cairns subdivisions are pretty much walking out the door
Our tourism industry is bouncing back, which is great, and we haven't even seen the return of international tourists yet. So that's a really exciting prospect once we see international tourists back on our shores. I think finally, probably education. It's a really moving industry in Cairns. We've got two universities and both of which are heavily investing in our region.
We've got James Cook University, which is building a university hospital right here in the city of Cairns. And then we've got CQ University, which is building headquarters right in the city, which I believe will hold about 4,000 students.
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Chapter 7: What future developments are expected in Cairns?
And Cairns has always needed a third pillar of industry on the back of construction and tourism. And I think education might be it. So I think we're heading in the right direction. And just before I let you go, about a week or two ago, I was talking about this bunker, this abandoned building site in Cairns there, which is fairly well known.
We told the story to our audience about how that sort of all evolved from the person that bought it. It's been sitting idle for, I think, about 30 years. What do you know about that? I know that it's there. And when you drive along our Captain Cook Highway as you head north, you can certainly see it. I think it's probably an opportunity for somebody to come in and build a wonderful home on.
I think it's sad to see something just sitting there when somebody could come along and make it something fantastic. So I'd like to see it probably go to a new buyer who might dare truly better actually make something of it. All right, well, thanks for coming on to The Real Estate Podcast this morning and all the best there in Cairns, Kyle. Thank you very much.
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