While the end of the mining boom has come close to delivering a knockout blow to many regional centres in the state, areas such as Cairns and Townsville may be locations to keep an eye on if traditional market forces play out.
According to Jennifer Smith, founder of NQ Buyer’s Agent, the momentum currently in driving the state’s south east corner stands a good chance of spreading across the state.
“Historically it has flown up,” Smith told Your Investment Property.
“It starts in Sydney and then we see it move up into Brisbane and then up again from there. There really does tend to be a wave that flows north,” she said.
In this cycle the wave may have decided to break on Cairns first, with the tourist city currently enjoying better conditions than its southern neighbour of Townsville.
Figures from the Real Estate Institute of Queensland (REIQ) show Cairns’ median house price at $400,000 at the end of the March quarter, a 3.3% increase over the previous 12 months.
Though that may not be significant increase over the year, Smith said the outlook for Cairns is positive.
“Cairns has been going through a period over the last few years where it’s just been steadily rising and consolidating and people seem to be taking notice of that. At the moment it’s a combination of lifestyle and investment opportunities driving it,” Smith told Your Investment Property.
“The majority of the people I’ve dealt with recently in Cairns are from areas like Sydney and are relatively cashed up and are looking for something to buy now that’s going to improve over the next few years before they move into it.
“There’s a few looking at it the other way round as well. They want something they can move into now and then hold onto as an investment property if they were to move out of the area in a year or two.”
For Cairns, Smith said global economic conditions are also proving positive, with a weakening Australian dollar and post-GFC conditions bolstering the tourism sector in the city, which is having flow-on effect to the housing market.
While tourism plays a part of Townsville’s economy, those conditions haven’t had as much of a positive impact in the city, with the REIQ figures putting it’s median house price at $347,000 at the end of the March quarter, a 2.3%% fall over the previous 12 months.
Despite that, Smith said the city is one investors should still be keeping at least one eye on.
“We haven’t had a lot of interest in Townsville recently, but in the last month or so it’s come on the radar for a few people and they’ve been testing the waters a bit with some lowball offers,” Smith told Your Investment Property.
“It may not be the right time to buy now, but I’d certainly be keeping my eye on it at the moment.”
For Townsville, Smith believes much of its recovery will come of the back of infrastructure improvements, with funding allocated for projects such as airport, hospital and port expansions along with a new sporting stadium and entertainment precinct.
“We’ve seen a bit of activity in the commercial sector from Asian investors and that seems to be picking up the economy a bit,” she said.
“When projects like the new stadium get underway, that’s when we’ll start to see things really pick up.”
