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Investing in Cairns!

There are over 15,000 unique suburbs across Australia many of which have their own pros and cons, whether it’s in our various Capital Cities, Satellite Cities or Regional Australia.

It can be extremely difficult for everyday property investors to narrow down and select a location suitable for their investment goals, budget, and risk profile.

The team at Tropical Life purchase investment properties all year round in Tropical North Queensland and speak to investors on a weekly basis. In a hope to bring this marketplace some justice we’ve decided to build an investment case for Cairns, that provides future investors’ insight about the property market so they can put it on the location shortlist.

Cairns, Tropical North Queensland has been a location over the last 20 years that’s had a healthy transaction volume of investors around 20-25%. For a regional property market this is a very healthy number and shows that over the last 20 years Cairns has been an attractive proposition for a variety of investors both sophisticated and novice.

So, what exactly has been driving investors to this marketplace? The Tropical Life brains trust has formulated the following list:

  1. Stable Economy

The Cairns economy has always made a nett contribution to Queensland Gross Domestic Product around 3% and this robust and versatile economy has kept unemployment rates below the National Average for long periods of time and enabled many to buy and hold property in Cairns. As a result, the Cairns Market Property has not had any huge volatile swings or crashes but rather a haven for equity accumulation. Many believe that the Cairns economy is overly dependent on the tourism industry however tourism is not even the biggest industry in Cairns.

  1. Affordability

Cairns with a median house price under $600,000 presents as great value for money when benchmarked across Queensland. As many capital cities across the country become virtually unaffordable for investors, locations such as Cairns continue to stack up as an attractive proponent which offers much lower risk. Investors would rather spend $500,000-$700,000 of a $1,000,000 dollar pre-approval buying in Cairns rather than spending $1,000,000 in a capital city. This affordability presents great upside potential for capital growth into the future if Cairns follows the trend of Brisbane, Sunshine Coast and Gold Coast where median house prices are above $900,000. In various suburbs across Cairns, they have performed well on annual percentage basis in terms of the median growth rate like to many well-known capital city suburbs. 

  1. Lifestyle

The warm tropical climate has played a pivot role in sustaining and growing the Cairns property market for a long period of time. In fact, many domestic tourists when they come to Cairns fall in love with the warm weather, reef, beaches and rainforest then decide to purchase property in the area for this lifestyle all year round in-turn driving the property market.  These lifestyle drivers are permanent and will continue to create desirability for people to live in Cairns, and this allows investors to cash in on the demand and often emotional buyers.

  1. Positive Cashflow

Cairns has a great advantage over capital cities with the median house price sitting under $600,000 this means that many suburbs and dwellings across Cairns have positive cashflow potential. In addition, these properties can often sit in very desirable pockets around Cairns with good demographics and high owner occupier percentages unlike the capital cities where this budget often gets you into undesirable low-socio economic areas.

These have been the key drivers for attracting investors to this marketplace and they will continue to play a pivotal role for many years to come. When you add this to other drivers such as rapid population growth, big public infrastructure spending and high employment rates Cairns is a market that will continue to appeal to a broad cross section of investors.

If you would like to know more about investing in the Cairns property market. Book a call with the team at Tropical Life Buyers Agency.

Troyson Bassani

Owner & Head of Research

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