Monday, August 5, 2013

A tale of two markets

The latest CairnsWatch report includes special topics on residential land supply and residential apartments. Land supply in the HTW survey has reduced to 657 lots with increasing sales, however as posted previously there is a substantial stock of approved lots outstanding and an anticpated rebuild of supply is noted.

Residential apartments are a different story:
The Cairns new unit market remains in the doldrums, with just 71 sales of new residential units occurring in the past year, mostly of leftover stock from long since completed developments.
Unsold residential new unit stock has fallen to 174 units at the end of June 2013, due to progressive slow absorption and an almost complete lack of new construction.
The Cairns Post has reported on this sluggish market for units with the finger again being pointed at body corporate and insurance fees. The chief advertorial writer has included promotion for a building of 12 units in Buchan St being advertised as "the only brand new units in Cairns" featuring low fees.

I wandered along to the open house on Sunday morning and can't say I found the offering particularly appealing, a box off Mulgrave Rd in Westcourt, despite the relatively low estimated ongoing costs. At  $325,000 to $385,000 for two-bedroom properties in that location I don't think it would be hard to find better long term value at the moment.

The Cairns Post followed up with yet another report on strata insurance although I found this somewhat confusing and not sure equivalent numbers have been used for some comparisons there. It also displays again a naivety on complex insurance issues which has taken the debate down a dead end of impractical solutions never likely to be implemented.

Rick Carr has also provided material from his recent Cairns Chamber Presentation and the HTW Monthly also provides a national roundup including commentary on cairns property markets.

Update: The Cairns Post has followed again today with another yarn on strata insurance. This one seems as much part of the start of the political campaign as anything and the calls for Federal intervention seem to ignore that most of the solutions currently proposed by Entsch relate to State issues. A topic for another post!

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