Conditions in the local economy are slowly getting better, but it is taking a long time for these to filter into improvements in consumer confidence which is needed to resurrect the local property market. The building industry also remains at a low ebb, with a dearth of new housing construction projects inside Cairns, particularly of units.

However one comfort factor is that vacancy rates for rental property have tightened further over the past twelve months. According to the Herron Todd White Rent Roll Survey, vacancy rates for houses have come down from a trend level of 4.% in December 2010 to 2.2% in December 2011, while those for units have come down from 4.8% to 4.1% over the same period. In addition the December quarter saw average rents show an increase, rising by about $7 per week compared to September.

Tight rental market conditions, rising rents and affordable property prices will provide the pre-conditions for the market to enter modest recovery mode during the next twelve months.

Source: Herron Todd White