Cairns set to avoid price drop seen in capitals

AFA FALL in Sydney’s house prices for a s second month is unlikely to impact property prices in Cairns, a local property expert said.

Cairns research director for Herron Todd White Rick Carr said he expected little, if any, impact on the Cairns market as prices adjust in capital cities.

“Sydney (and Melbourne and Perth) are in completely different m market positions to Cairns,” he said.

“Sydney is way overheated. “O “On the same scale Cairns is quite undercoo undercooked.” Mr Carr said the Cairns market was often counter-c counter-cyclical to the national trend. “Th “The worse the national economy gets and the lower the Australian dollar fa falls, the more competitive our touri ism industry becomes, the more our local economy improves and the more our real estate market revitalises.

“Cairns remains in a positive position at present compared to the downward adjustments taking place in the major capitals.”

According to CoreLogic RP D Data’s latest home value index, capital cities are tipped to ease after posting theirt slowest gains in three years during 2 2015. Prices endede the year flat in December, with falls in Sydney, Canberra and Adelaide offsetting gains in the nation’s remaining five capitals.

Overall growth for 2015 was below the previous year with prices rising 7.8 per cent to a median of $595,000 – the slowest pace since 2013 when prices rose nearly 10 per cent.

CoreLogic RP Data head of research Tim Lawless said Sydney remained Australia’s most expensive city.

He also tipped “more sedate” conditions for the first half of this year.

Mr Carr said Cairns was relatively protected despite some southern investors experiencing price falls in their hometown markets.

“A major driver of the previous (mid-2000s) boom in Cairns was equity generation as a result of sky rocketing property prices in the major capitals being recycled into out-of-town property investment in Cairns at a time when Cairns was flavour of the month,” Mr Carr said.

“We haven’t been seeing that in the current cycle.

“Bottom line, I expect little if any impact on the Cairns market from the adjustments now taking place in the major capitals. Its more the other way round, they are potentially indicative of better times ahead.”

Mr Lawless tipped Brisbane to be a star performer in 2016, with rental yields much higher than Sydney and Melbourne and prices much more affordable.

Darwin and Perth are expected to again underperform amid ongoing economic uncertainty, but Mr Lawless expects the rate of price falls to ease.

Additional reporting AAP