It is well documented that the Cairns economy experienced a tough year during 2009, with the slowdown of the tourism and construction industries causing a large jump in unemployment.

Despite the economic situation, the Cairns property market has demonstrated a high degree of resistance during the course of 2009.

We have experienced increased sales volumes throughout the year, highlighted by multiple record months, driven in part by the First Home Owner Grants doing their job, and prices stabilising at about 5% to 10% below the peak price level reached in early 2008.

The perception is that the market has now definitely bottomed. Just as a major global recession is an once-in-a-lifetime event, so are the investment opportunities it creates once the dust has settled.

The biggest lesson of the past year or so is the need for diversification. Property provides an effective anchor in any investment portfolio, with strong rental yields balancing declining asset values.

The next six months may be the time when many investors re-enter the property sector, particularly those who are re-constructing their DIY super funds.

Picking the bottom is a great concept – but not even the greatest economists and analysts in the world can do it until after the event. It’s also understandable that some investors may be feeling nervous with the financial challenges of the last 18 months still fresh in their minds. There’s nothing wrong with being cautious.  But there is a science to investment and the fundamentals should always dictate our choices – not nervous market sentiment.

Everyone’s a genius in hindsight and 2010 is the time for confident decisions. Smart investors know that to make the biggest gains you have to be willing to move first – before the rest of the herd mobilises and the recovery really gets underway.

One thing is for sure – markets and economies are cyclical and what goes down will eventually go up.

We take this opportunity to wish you and your loved ones a safe and happy festive season, and hope to catch up with many of our valued clients and friends as they visit Cairns during the summer break.