Many agents are confident investors will return before the end of the financial year as investors flock to Cairns to snap up a bargain.

"The reduction in Cairns’ housing price market will begin to bring back the investor activity – trust me the savvy ones are already out there picking up good deals," Powe Property agent Ben August said.

"With the current housing market in the Cairns region we are starting to see property investment change which is for the better.

"A few years ago you would expect to pay $320,000 for a house and it was rented for $300 per week but now properties are being purchased at $280,000 with a return of $300 per week – an investor’s dream.

"So with stable rents, increasing demand and less pressure on property prices I believe there are plenty of opportunities available to bring the investors back to our region."

Mr August said he believes people are now turning to the property market for a more stable investment rather than the share market.

"With the share market the way it has been over the last few years, we are now seeing the older and younger generation start accessing their super or taking control of it. They are opting to put their hard-earned funds into something more solid – the good old bricks and mortar."

The Real Estate Institute of Queensland (REIQ) conducted buyer and seller behaviour research late last year that found capital growth was the top reason for buying an investment property in Queensland for 74 per cent of buyers.

The next most common reasons to buy investment property were to fund retirement, for negative gearing purposes, as a means of deriving an income stream, or because they believed it offered a better long-term return than shares or super.

"Three-quarters of the investors surveyed across the state indicated they bought investment property because of the potential for future capital growth," REIQ managing director Dan Molloy said.

"While Queensland has had a very tough start to 2011 it is heartening that many investors recognise the strength of our property market and the opportunities that remain for growth over the long term."

Of all the buyers surveyed in the research, 13 per cent bought a property for investment.

The REIQ conducted similar research in 2003 which found the proportion of investors was 40 per cent, however this number of investors was unusually high given the economic conditions of the time.

"Investors have mostly stayed on the sidelines during the past 18 months, but there are tentative signs they are re-entering the market," Mr Molloy said.

Cait Bester
The Cairns Post
Saturday, March 12, 2011