The Cairns
economy was hard hit during the Global Financial Crisis,
and for this reason there was a slowdown and contraction
of property prices through 2009. As a result the property
cycle is approaching the bottom, and is expected to
turn upwards in terms of renewed growth during the
second half of 2010.
The exceptional growth recorded through to 2007/2008
attracted many developers, and with the impact of the
GFC, the difficulties associated with obtaining credit
led to a sharp decline in the number of properties
under construction. This coincided with increased
unemployment due to the slowdown in tourism and construction,
so it was fortuitous that the housing supply reduced
demand declined. Cairns investment property numbers
were caught up in the contraction of supply, with
some banks using low valuations to restrict the flow
of funds.
The fundamental attractiveness of Cairns is linked
to its broad economic base, including tourism, construction,
and agriculture. Of increasing interest is the proximity
of Cairns as a holiday destination to hundreds of millions
of people across Asia. A major theme park is slated
for construction, and Air New Zealand has taken a 50
per cent share in the Cairns airport.
It is an unquestionable eco-paradise, with the affordability
and lifestyle that is attractive to people looking
to escape the crush and prices of major capital cities.
For property investment, Cairns has a lot of positives,
and these are expected to gain in profile as the regional
economy regains momentum.
Despite the tough impact of 2009, the Cairns property
market has shown remarkable resilience. The consensus
is that the market has stabilised, which in terms of
investment property terms, means that Cairns should
enter a new phase of growth. Property investors looking
for short term gains might still find good value as
the area comes out of the slowdown, however, it is
the long term prospects of Cairns as a uniquely attractive
city that could prove appealing for property investors
with a longer time horizon.
|
