A buoyant rental market has given investors confidence as returns pick up pace

first_imgCairns landlords continue to benefit from improving gross rental yields.CAIRNS landlords continue to benefit from improving gross rental yields, moving from 4.8 per cent in the December quarter to 4.9 per cent in the March quarter, as the rental market holds steady in healthy territory.The latest Real Estate Institute of Queensland Market Monitor, revealed that unlike many other regional markets, the Cairns rental market has healthy levels of vacancies, at 2.1 per cent in the March quarter. These measures will combine to give investors peace of mind and buyers considering an investment property the confidence to jump in.The sales market has proven similarly resilient. Median house prices have grown 2.5 per cent in the 12 months to the March quarter to $410,000.To put this into context, the Townsville market fell 3 per cent in the past 12 months to an annual median house price of $325,000. Cairns is among those regional markets to move into positive territory for annual median house price growth, joining Mackay (4.1 per cent).Market indicators, such as time on the market and vendor discounting, are also trending in the right direction.Days on market have fallen from 59 days in 2017 to 56 days in 2018. More from newsCairns home ticks popular internet search terms3 days agoTen auction results from ‘active’ weekend in Cairns3 days agoVendor discounting, which is a measure of the final sale price compared with the original advertised price, is also shrinking, moving from 8.1 per cent last year to 7.9 per cent this year.Looking at the forces of supply and demand, if stock numbers continue to remain tight we should start to see that translating through not just to shorter time on market but higher prices as well. As usual, we would look for this to occur in those areas with the tightest supply first, spreading to more populated housing areas with time.The unit market is our only weak point, although we can take some comfort in units being soft throughout Queensland. The annual median unit price fell 1.7 per cent in the 12 months to March 2018, to $232,000. Over time, this excess supply will be absorbed as the newer stock wins over buyers. It’s a trend we’re seeing in the southeast and we can expect that to happen here also.Looking into the current quarter and beyond, the Cairns property market shows signs of promise, though its yet to reach that exciting tipping point. – Tom Quaid is the REIQ Far North zone chairmanlast_img

Leave a Reply

Your email address will not be published. Required fields are marked *