I attended today’s Cairns Chamber of Commerce July business luncheon to hear the annual Regional Economic Forecast.
Here I share what Rick Carr* from Herron Todd White had to say about the present state of the Cairns real estate market:
“What we are seeing in this current property market cycle, is that it is taking much longer than normal for economic growth to feed through into job growth, to then feed through into property market recovery.
Normally we expect about a two year time lag for that sort of process to occur. We’ve been having tourism growth now for the last five years, or thereof, from a very low base that was influenced by a downturn. But that five years worth of tourism growth has really only over the last 12 months started to consolidate itself in improved employment outcomes and lower unemployment.
It’s yet to translate through into much in the property market, but the good news is with that tourism growth well entrenched, with things like three new hotels and developments on the go, things are definitely starting to pick up. The employment pick up seems to now be well entrenched and that ought to be translating now into an improvement in the property market situation.
Right now we are seeing a little bit of negativity in the market due to the national negative factors through the crack down on investor loans etc which have been a negative influence on the market. Thank goodness we had a little bit of growth in the market which has actually counteracted that to steady it out over 12 months, but as the influence of yet economic and job recovery in the market feeds through, we should start to see that the property market shouldn’t be too far behind.”
*Rick Carr has been the Research Director at property advisers Herron Todd White in Cairns since 1998 and has a career history revolving mainly around economic research and consulting. He is also well-known as the author of the CairnsWatch monthly economic and market indicator publication, and as an expert commentator on the Cairns property markets.