Slow start to the year for Cairns: Local market update

It has been an interesting start to 2014. Traditionally we get quite a few tenants vacating in December.  This happened to a fair bit and if we don't have these properties re-let by mid to late December, the chance of reletting them drops each day.  Between the December 20 and the first business day back from New Year there is a very remote chance someone will be wanting to rent a property out.  

Traditionally on the first business day back from New Year there is a huge demand from people looking for rental properties.  We have a large number of people moving to Cairns for the start of the year - teachers, doctors, nurses, police, university students and TAFE students to name a few.  

We were back in the office for this when the phone simply didn't ring for the first week back - I started to worry.  

If you did a search for all available rentals in the Cairns greater region mid to late 2013, you would have found between 550 - 650 available rentals.  This covers an area from Gordonvale up to Palm Cove.  It also includes all rentals from a small budget studio, right the way up to an executive home.  For the first few weeks of January this figure was just over 900 or a 50% increase.  It has now gone down to 890 but it is still much higher than what we had prior to Christmas.  

We had a unit that became available just before Christmas.  It is small, but it is a really nice unit.  We have repainted it internally, had new lights and fans installed, new curtains and the furniture upgraded.  It presents really well. It has a kitchen with an upright stove, a fridge and even a washing machine in the bathroom.  These are really popular with people that are on a budget and don't want to share.  We were easily renting them out for $175 per week last year.  This particular unit sat for weeks without any one even asking to inspect inside.  I dropped the price to $170 per week and in four weeks we had a total of two inspections.  Fortunately a lovely Korean couple has taken it, but it was bringing back memories of the barrel which I just don't want to get back into.  

The level of enquires was lower but the "trash element" was so much higher.  It was not restricted to just this budget property, it went right the way through the available rentals.  Fortunately we have managed to clear most of the vacancies and just have a few left.  

I am hoping it is a combination of a few factors:  

• Christmas and New Year left over quiet phase

• Wet season down time - it has been incredibly hot and humid

• Brewing cyclone off the coast - this sent things quiet all this week

• Later start to the year - school and contracts seem to be starting at the end of January rather than the traditional early part of January.

Although we have dropped the rents slightly, they are still at higher levels than they were 12 - 18 months ago.  This is assuming that the property presents well internally.  I can't tell you how often the potential tenants tell us that the other properties they have seen are just awful - particularly when they walk into one of ours that presents well. 

This is going to be a key part of getting and keeping good tenants in 2014.  It is also crucial for us to be able to get higher rents.

Linda Tuck is director of Cairns Property Ladder Realty,  an independent real estate agency in specialising in property management, investment and sales expertise in the tropical Cairns region. 

Cairns market has well and truly turned and new developments could be a game changer by Linda Tuck

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