Sunday, October 19, 2014

Cairns rents fit for a King

Residential Tenancies Authority rental bond data for the September quarter shows Cairns surging past both Townsville and Mackay to take the crown for most expensive rentals of the North Queensland regional cities.

The components of the rental market vary in each city. Cairns has a higher proportion of units than Townsville which is higher again than Mackay.  The dominant components in all are 2 bedroom units, 3 bedroom houses and 4 bedroom houses. The pattern in the graph above is replicated in the other components with the current status in the September quarter:


This RTA data is for new rental bonds during the quarter so would represent the most recent state of the market but not the full stock of rental bonds which would be expected to lag any movement. RP Data have released their September rental update which does show some differences although with the same patterns replicated: RP Data National September Quarter Rental Review 2014

This also shows dramatic falls in Mackay but with unit rents there still above Cairns. I have sent a query to RP Data to clarify their data. The RTA rents I have graphed above also match the current asking rents displayed at SQM Research.
Mackay and Townsville both have a higher proportion of 3br in their unit mix while Cairns has a relatively higher proportion of 1br which could also shift the median when the sector is aggregated as RP Data have done. New stock may also have a disproportionate influence on new rentals.
Housing news this week though was the state pitching in $9 million for land development infrastructure in the southern corridor: First stage of Edmonton’s Mt Peter residential mega-development gets go ahead by State Government
Which seems slightly asymmetrical with the Aquis world view in their response to submissions released last week:
Currently the majority of the residential growth (and employment) is planned to be accommodated in consolidated densification in the central suburbs and around Edmonton as well as in the urban expansion area known as Mt Peter located between Edmonton and Gordonvale to the south.
Given the location of employment north of the city and residential growth south of the city, the creation of travel demand through the southern and central suburbs will expose the existing constrained transport corridors to increased congestion and extended travel delays.
Given the nature of Cairns as a linear city consisting of urban development on a narrow coastal plain between mountain ranges to the west and the Coral Sea and Trinity inlet to the east, there is limited capacity to upgrade transport corridors to accommodate the travel patterns that would result from persisting with the current planned settlement pattern.

Note: The state electorate of Cairns has one of the highest proportions of renters in Queensland.

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