Saturday, August 1, 2015

CairnsWatch: Domestic passengers land safely! Building approvals set for take off?

The latest HTW CairnsWatch for July is out and most noted was that their reported airport domestic trend passenger growth has landed safely from a previously hyperbolic altitude back to a more reasonable 3.7%.  Now uncertain on their trend building approvals for Cairns though which seem somewhat elevated above the Conus Trend: Building Approvals show some improvement in FNQ

Never mind there is otherwise some interesting property analysis in there and also in Rick's recent Cairns Chamber Presentation. Anecdotal feedback has been a busy July around Cairns and Port Douglas with tourism accommodation scarce. However the opening paragraph at CairnsWatch probably remains a good summary of the current state of play:
Cairns is starting 2015-16 in much better economic shape than it started 2014-15. Even so, the economy has not yet become buoyant. Future business indicators such as tourism arrivals and housing construction are good, but they are not filtering through as rapidly into improved job creation and reduced unemployment

Last year I attempted to provide some context to a recovery in Cairns building approvals with a graph of approvals relative to population for the large regional and metropolitan council areas. It looked like this for FY2014:

With a month to go and June data out next week the comparison for 2015YTD to May looks like this:

The dramatic shift there is the move by Gladstone and Mackay from one end of the scale to the other. Relative building approvals above the Queensland average have been entirely in SEQ. Cairns has improved its position but not by much and again it is the volatile unit sector missing so far. If the comparison was just houses Cairns would be close to the Queensland average.

The building approvals trend in Townsville has been lower but appears to have maintained momentum relatively well compared to other coastal regional cities. The median house price comparison in the HTW reports show a stronger trend in Cairns relative to both Townsville and Mackay similar to my recent post on rental comparisons. Townsville median has been trending lower for some time and is now at a multi-year low again indicating a well supplied market on this measure.

Note: Populations are from ABS at June 30 2014. Douglas, Noosa and Livingstone have been re-amalgamated to enable relevant comparison.


  1. Interesting Mark. I also have some serious doubts about Rick's Building Approvals Trend series for seems to have spent the last 7 months far higher than the original data would suggest. Indeed in 4 of those 7 months the Trend has been significantly higher than original and in the other 3 at least slightly higher. Our 2 estimates for May 2015 look relatively close around 68 (HTW) and 66 (Conus) but we have May 2014 at 58 while Rick seems to have something around 50.
    Either way the general trend is the same.

  2. No it just doesn't eyeball properly and seems exaggerate rather than smooth any volatility.