There is a continuing gulf between residential and tourism property in Cairns, with tourism property continuing to under perform in the general market in terms of sales rates, prices and yields.

Tourism properties are difficult to sell in the current market environment, even though they are still selling at significant discounts, in some cases of up to 30%, of previously achieved prices.

Stronger tourist numbers this season are infusing extra activity and jobs into the local economy, and more importantly extra confidence into the market, but progress is slow. However the high Australian dollar, which weakens the attractiveness of coming to Cairns compared to alternative destinations overseas for both domestic and international tourists, is taking the gloss of the improvements made to date and reinforce that recovery in the Cairns market will be a slow process.

The good news for the residential market is that the Cairns region’s unemployment rate is continuing to tumble as jobs growth starts to return. These conditions are expected to feed through into gradual improvements in property market conditions over the next 12 to 18 months as their positive effects filter through. We expect the recovery to be concentrated initially in the more popular inner suburbs, but to progressively extend to the central area at large, the Northern Beaches and the Southern Corridor as the market recovery takes hold.

Source: Herron Todd White