MARKET IS VERY TIGHT

An influx of people from the south could really drive prices up

PROPERTY managers handling some of Cairns’ largest rent rolls are advertising record low vacancy rates (below 0.5 per cent), and properties in many areas are selling faster and in some cases for more money than we would have anticipated pre-COVID.

At this rate we’re looking down the barrel of a severe shortage of titled residential land before Christmas – what a year.

So, that’s the current state of affairs. But what happens next? In counterpoint to the doom and gloom that so many had previously predicted and got so clearly wrong, why don’t we instead look at what might happen if the newspapers are right with their latest predictions and we do see a wave of southern buyers and renters escaping Sydney and Melbourne for brighter and COVID-free climes.

Now, we don’t want too many of them, so let’s keep the numbers reasonable.

There are give or take 10 million people between those two capitals – so approximately 1 per cent would be 100,000 (still too many), so let’s look at just 1 per cent of that original 1 per cent – that would make it around 1000 people flying the coop to Far North Queensland (a 0.01 per cent exodus).

Well, if you wanted an indication of what a tight market looks like then this is a pretty good example. According to realestate.com.au there are just 471 properties available for rent in the Cairns market today. That’s not just the “good” rentals either; that’s anything with four walls and a roof, Palm Cove to Gordonvale, and as far west as Kuranda. Put 1000 new people in town and that supply dries up very quickly.

And what if they buy? Again, the current property market is tighter than we would normally expect across a lot of categories and I’m personally seeing buyers miss out almost as frequently as I see them succeed. While the “cashed up southern buyer” has been a stereotype that many a seller looks for, they haven’t been thick on the ground for some time (if ever).

In a new world though, with their multimillion-dollar home sold, new post-COVID priorities and visions of the beach? That tells a very different story; one where we start to see a wave of change, with demand exceeding supply and prices soaring.

Unrealistic? Maybe. But sometimes it’s worth considering what the big impacts of a small change can truly mean.