Cairns Property Market Recap:

Overview and 2024 Outlook

1. Rental Market: Extreme Tightness

• Vacancy Rates: The vacancy rate is critically low at 0.7%, indicating a severe imbalance between supply and demand. This rate has consistently stayed below 0.8% over the past two years, far below the 2.6-3.5% healthy range.

• Rental Prices: Rental prices have surged, with the average weekly cost for a three-bedroom house now at $490, or over $25,000 annually. This trend is directly tied to the low vacancy rates.

2. Property Prices and Median Values Across Suburbs

• Current Trends: Property prices in Cairns have been on an upward trajectory, influenced by the high demand in both the rental and sales markets.

• Median Values: There is variation across different suburbs, with some experiencing sharper increases. Coastal and central locations, in particular, have seen higher property value growth due to their desirability.

• Comparative Analysis: Suburbs closer to the city center or with better amenities have consistently commanded higher median prices, reflecting a demand for convenience and lifestyle.

3. Rental Yields

• Yield Performance: Despite the high property prices, the rental yields in Cairns remain attractive, buoyed by the rising rental costs. This makes the region particularly appealing to investors.

• Suburb Variation: Rental yields vary by suburb, with some offering higher returns due to their location, property type, and demand.

4. Market Drivers and Influencers

• Population Growth: The region's population growth, driven by interstate migration and lifestyle factors, has been a significant contributor to the property market's dynamics.

• Economic Factors: Economic stability and job opportunities in the Cairns region also play a crucial role in driving demand in the property market.

5. Market Trends and Outlook for 2024

• Continued Demand: The demand for both rental and purchase properties is expected to remain strong into 2024.

• Potential Developments: New property developments and investments may begin to respond to the market tightness, potentially easing the pressure over time.

• Pricing Trends: Property prices are likely to continue their upward trend, though at potentially varying rates across different suburbs.

6. Conclusion and Future Projections

• Short-term Outlook: For the short term, the Cairns property market is anticipated to remain competitive, with high demand and low supply driving prices.

• Long-term Possibilities: Over the longer term, the market may see some balancing as new developments come to fruition and the market adapts to the persistent demand.

In summary, the Cairns property market at the end of 2023 shows a complex picture of low vacancy rates, rising rental and property prices, attractive rental yields, and sustained demand. The 2024 outlook suggests a continuation of these trends, with the potential for gradual market adjustments as new developments and investments start to impact supply and demand dynamics.