Spring start brings attractive market period for Cairns buyers and sellers
IT’S not just daffodils and roses that flourish in spring, the post-winter months are some of the busiest in real estate for both buyers and sellers.
Elite Real Estate Services sales director Karl Latham said spring was an attractive period of the year for interested buyers and the weather played an important role in offloading homes quickly for sellers.
“Around this time of the year, prior to the wet season, people try to offload their properties because they’re worried about (delayed) maintenance issues during the heavy rainfall,” Mr Latham said.
“People have done their tax returns and all the public holidays are out of the way so buyers are out there in force.”
Mr Latham said investors also used their tax returns in spring to build their property portfolios.
He said, although most sellers were not concerned with who bought their property, there were ways to attract investors to a property.
“So if you’re specifically targeting an investor, you can include (in your ad) the return on investment, the potential income achievable, the rental figures and all the facts and figures that an investor might want to know.”
In the past three years the Far North has experienced a slow, 0.8 per cent growth in median house prices, especially when compared with Brisbane’s 8.7 per cent change, Sydney’s 4 per cent and Melbourne’s 18.5 per cent in the same period, according to CoreLogic.
However, REIQ Cairns zone chairman Tom Quaid said this should not deter investors from buying in the Far North, with rental yields making up for lack of capital growth.
In the past 12 months the Far North has recorded a gross rental yield of 5.5 per cent, which compares favourably to Brisbane’s 4.1 per cent, Sydney’s 3.1 per cent and Melbourne’s 4.2 per cent.
“Here, if you’re looking for capital growth, it’s much more of a long-term prospect, so you’re looking more at your (rental) yields,” Mr Quaid said.
“The benefit is that Cairns has quite strong rental yields on the basis that we’ve got very tight rental vacancy rates and because we haven’t had that price growth, our prices have still remained quite affordable from a purchase perspective.”
Mr Quaid believes the $300,000 to $400,000 purchase price range tends to be the sweet spot for rental returns.
“Say if you had a $350,000 home that you purchased in Westcourt or Manoora – they’re close to town, close to services – it’s going to be a reasonably solid home in that price point.
“In those areas you’re probably going to rent it for somewhere between $400 and $450 per week.”
Mr Quaid said Manunda, Manoora and Mooroobool were fantastic from an investment point of view because their reputations had driven house prices down, but rents could only go so low.
“To get a house virtually anywhere, even if it’s small and in rough condition, you’re going to struggle to get something for less than $300 (in rent) a week.
“So you’re buying something for say $230,000, you’ve got a rental income of $320 a week … it stacks up very well if you’re looking for something that’s potentially cashflow positive straight away.”
Apartments were also viable investment options within those suburbs, Mr Quaid said.
“You can get quite a good unit for $150,000 to $220,000 that’ll be two bedrooms, one or two bathrooms; it’ll be 15 to 20 years old and in reasonable condition, in a decent complex, and you’d be getting rent in the high ($200 to mid-$300 range).
“So you’ve got a cheaper point of entry, you’ve got a product that is going to rent well, you’ve got less maintenance costs and you’re depreciation is still going to be pretty good.”