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| HERRON TODD WHITE Research CONTACT US P 07 4057 0200 | F 07 4051 3946 | E [email protected] CAIRNSWATCH June 2012
Overview June 2012 The Cairns economy has experienced a tough year during 2011-12 but there are positive indications of improvement, with growing tourism numbers and expectations of a renewal of building activity stimulated by rental housing shortages. However the recovery has been, and will continue to be, slow progress. If you aren’t yet on our CairnsWatch mailing list please sign up here – it’s free!
At A Glance Airport Domestic ▲ 7.6% (Nov 2011 to May 2012) Passenger Trend: Trend Unemployment ► at 8.6% (end May 2012) Rate: Employment Trend: ▼ 4.2% (May 2011 to May 2012) Rental Vacancy Rate: ▼ to 2.1% (end May 2012)
Rick Carr
Research Director Herron Todd White Cairns
Phone: 07 4057 0200
Fax: 07 4051 3946 Email: [email protected]
The Fine Print: Information in this publication is based on an analysis of data from a number of sources, subjected to technical procedures of seasonal adjustment and trend analysis. Seasonal adjustment is a means of removing the effects of normal seasonal variation from the data, so that comparisons can be made of data against their established seasonal patterns. Trend analysis smooths the seasonally adjusted estimates to provide a clearer picture of the underlying behaviour of the series over time. The trend estimates are derived by applying a 13-term Henderson-weighted moving average to the seasonally adjusted data. It applies the same procedures used by the Australian Bureau of Statistics in producing trends for national aggregates. No responsibility is accepted to any third party that may use or rely on the whole or any part of the content of this publication. Neither the whole nor any part of this publication or any reference thereto may be included in any published or photocopied documents, circular or statement, nor transmitted or published in part or full in any way, including electronically, without written approval of the form and context in which it may appear. Liability limited by a scheme approved under Professional Standards Legislation. The scheme does not apply within Tasmania © HTW Copyright 2012
| HERRON TODD WHITE Research CONTACT US P 07 4057 0200 | F 07 4051 3946 | E [email protected] CAIRNSWATCH June 2012
Employment Persons Employed in FNQ
Total employment published for the Far North (Cardwell to the Torres Strait) continues to evidence a weakening trend. The number of people employed in FNQ has reduced in trend terms from 135,000 in May 2011 to 129,300 in May 2012, a reduction over the last twelve months of 4.2%.
FNQ Unemployment Trends
The Far North’s published unemployment rate reduced from 9.3% in April 2012 to 9.1% in May 2012, but its trend rate remained virtually unchanged at 8.6%. The region’s trend unemployment rate has stagnated at around 8½% since mid last year, and remains higher than the State wide trend of around 5½%.
Source: Derived from ABS Labour Force Survey data
May-02Nov-02
May-03Nov-03
May-04Nov-04
May-05Nov-05
May-06Nov-06
May-07Nov-07
May-08Nov-08
May-09Nov-09
May-10Nov-10
May-11Nov-11
May-12100,000
110,000
120,000
130,000
140,000
150,000
Number of Persons Employed
Original Trend
Source: Derived from ABS Labour Force Survey data
May-02Nov-02
May-03Nov-03
May-04Nov-04
May-05Nov-05
May-06Nov-06
May-07Nov-07
May-08Nov-08
May-09Nov-09
May-10Nov-10
May-11Nov-11
May-122%
4%
6%
8%
10%
12%
14%
Unemployment Rate (Actual and Trend Basis)
Far NorthQueensland
All Queensland
| HERRON TODD WHITE Research CONTACT US P 07 4057 0200 | F 07 4051 3946 | E [email protected] CAIRNSWATCH June 2012
Employment Job Ads in The Cairns Post
The trend in jobs advertised in The Cairns Post has been progressively weakening over the last twelve months, having reduced by 18.4% since June 2011. Job ads remain higher than they were immediately after the GFC but they are now not really sufficient to generate forward increases in net monthly employment.
HTW Cairns does… Property Valuations Herron Todd White Cairns has a wealth of experience in providing valuation services across the commercial, industrial, rural and residential property sectors. From residential units and townhouses to specialist valuations, acquisitions and resumption, Herron Todd White Cairns’ team of specialist staff provides valuations across all property types.
Source: HTW Analysis of the Cairns Post
May-02Nov-02
May-03Nov-03
May-04Nov-04
May-05Nov-05
May-06Nov-06
May-07Nov-07
May-08Nov-08
May-09Nov-09
May-10Nov-10
May-11Nov-11
May-12
100
200
300
400
500
600
700
800
Number (Average per Week)
Actual Trend
| HERRON TODD WHITE Research CONTACT US P 07 4057 0200 | F 07 4051 3946 | E [email protected] CAIRNSWATCH June 2012
Tourism Airport Passenger Numbers
A relatively good May result has maintained the passenger number trend at the domestic terminal on a firm rise, with the trend volume increasing over the last six months by 7.6%. Meanwhile passenger trends at the international terminal, which had been losing ground since mid 2011, have now stabilised.
HTW Cairns does… Tax Depreciation Schedules Do you have an up-to-date tax depreciation schedule? You could be missing out on thousands of dollars each year in allowable depreciation for your investment property. Depreciation is an important part of maximizing your investment returns from an income generating property. Contact us on 4057 0200 for an obligation-free quote.
Source: Derived from Cairns Airport data
May-02Nov-02
May-03Nov-03
May-04Nov-04
May-05Nov-05
May-06Nov-06
May-07Nov-07
May-08Nov-08
May-09Nov-09
May-10Nov-10
May-11Nov-11
May-1230,000
50,000
75,000
120,000
200,000
320,000
Monthly Passenger Arrivals + Departures (excl Transits)
Domestic Terminal
International Terminal
| HERRON TODD WHITE Research CONTACT US P 07 4057 0200 | F 07 4051 3946 | E [email protected] CAIRNSWATCH June 2012
Property Median Property Prices
Even though property sale activity in Cairns has been increasing over the last twelve months, it comes from a low base and the prices being achieved remain weak. The April 2012 Cairns median house price trend came in at $343,000, which represents a decline of 3.7% since April 2011. Meanwhile the median established unit price trend came in at $187,000, a reduction of 3.6% since April 2011. N.B. The median property price is the sale price of the middle-priced property from the list of properties sold each month. Movements in median prices do not necessarily equate to movements in individual property values.
Rental Vacancy Rates
Cairns rental housing remains in short supply and vacancy trends are reducing sharply, especially for units. The trend vacancy rate for houses was 1.9% during May 2012, while units lowered to a trend vacancy rate of 2.4%. The overall market vacancy rate of 2.1% is fast approaching the sub-2% ‘stress level’.
'Balanced Market' Range
* All sales are classified to date of contract (not date of settlement)** Recent months are provisional and subject to revisionSource: HTW Analysis of RPData
Apr-02Oct-02
Apr-03Oct-03
Apr-04Oct-04
Apr-05Oct-05
Apr-06Oct-06
Apr-07Oct-07
Apr-08Oct-08
Apr-09Oct-09
Apr-10Oct-10
Apr-11Oct-11
Apr-12$50,000
$70,000
$100,000
$140,000
$200,000
$300,000
$450,000
Median Sale Price (Log Scale)
Houses
Vacant Land
New Units
EstablishedUnits
Source: HTW Rentroll Survey
May-02Nov-02
May-03Nov-03
May-04Nov-04
May-05Nov-05
May-06Nov-06
May-07Nov-07
May-08Nov-08
May-09Nov-09
May-10Nov-10
May-11Nov-11
May-120%
2%
4%
6%
8%
Houses Units Total
| HERRON TODD WHITE Research CONTACT US P 07 4057 0200 | F 07 4051 3946 | E [email protected] CAIRNSWATCH June 2012
Property Building Approvals
Building approvals lifted significantly in February and March 2012, caused by a rush to beat the expiry of the $10,000 Building Boost grants, but this increase has not been sustained and April’s approvals have reverted to previous levels. Whilst the demand for new housing in Cairns remains weak, the ray of hope is that rental housing shortages (as shown in our chart on rental vacancy rates) will stimulate extra building activity by bringing investors and developers back into the market.
Special Topic – Commercial Property Yields
Commercial property yields have eased back from the record low levels observed at the start of 2008 to now average in the 7.5% to 8.5% range, compared to the 6.75% to 7.25% range previously evident. The spread of yields has also widened as a result of stronger demand for properties that are well located, modern and with good tenant profiles, but significantly weaker demand for secondary and/or vacant product.
Source: Derived from ABS data
Apr-08Jul-08
Oct-08Jan-09
Apr-09Jul-09
Oct-09Jan-10
Apr-10Jul-10
Oct-10Jan-11
Apr-11Jul-11
Oct-11Jan-12
Apr-12
0
50
100
150
200
250
Number of New Dwellings Approved in Cairns Urban Area
Houses Units Total (Trend)
Source: HTW Analysis
Jun-02Dec-02
Jun-03Dec-03
Jun-04Dec-04
Jun-05Dec-05
Jun-06Dec-06
Jun-07Dec-07
Jun-08Dec-08
Jun-09Dec-09
Jun-10Dec-10
Jun-11Dec-11
Jun-12
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Net Rental Yield
Actual Trend
| HERRON TODD WHITE Research CONTACT US P 07 4057 0200 | F 07 4051 3946 | E [email protected] CAIRNSWATCH June 2012
The National Property Clock as at May 2012
Herron Todd White’s National Property Clock is prepared each month based on the local market perceptions of its Australia-wide network of offices. Market positions Australia-wide were unchanged last month, and Cairns remains at the bottom of the cycle.
HTW Cairns does… Economic Research HTW Cairns carries out specialist projects in the field of socio-economic research and consulting, customised to your needs. Our services range from economic and demographic profiles, through to economic impact statements and cost benefit assessments. Contact us on 4057 0200 for an obligation-free quote.
Residential Property Ratings Compiled by Herron Todd White, May 2012
Bundaberg EchucaGriffith IpswichMelbourne PerthRockhampton
Alice Springs BathurstDarwin DubboEmerald GladstoneMackay MudgeeWhitsunday
Ballarat BrisbaneBendigo CairnsHervey Bay MilduraSouth West WA Sunshine CoastToowoomba TownsvilleTweed Coast Wagga Wagga
Adelaide Adelaide HillsAlbury Barossa ValleyBurnie-Devonport CanberraGold Coast GippslandHobart Latrobe ValleyLaunceston NewcastleSA Iron Triangle Sydney
NSW Central Coast OrangeTamworth WodongaWollongong
Starting to Decline
Declining Market
Approaching Bottom of
Market
Approaching Peak of Market
RisingMarket
Starting to Rise
Peak of Market
Bottom ofMarket
Entries coloured blue indicate changes in position from last month