Last year, in June 2008 thoughts were that a $500,000 property investment in Cairns would have secured a well located modern executive style dwelling typically renting for $430 to $450 per week. Alternatively, the same amount would purchase an above average quality unit in the heart of the CBD, located on the middle levels of a new high rise unit development. The $500,000 mark in the Cairns market is relative to the current median price level of around $350,000 for an established house and $365,000 for a new unit.

Since June 2008 the Cairns market, like most other markets around the country, has slowed considerably. Properties are continuing to turn over in the sub-$350,000 price brackets but are much slower to sell in the $400,000 and above price brackets. The investor with $500,000 to spend would find a large stock of sectors, styles and locations available to choose from – indeed at this price level there would be something for everyone. With the Cairns market now exhibiting softer value levels for residential property, investors will need to be prepared to hold for the long term and pay close attention to rental vacancy rates and rental returns in the meantime.

Source: Herron Todd White