Cairns unit price are climbing
A scramble for affordable housing has turned Far North suburbs into a pressure cooker, as a massive supply shortfall supercharges the region’s unit markets.
While a toxic cocktail of rate hikes and global anxiety has cooled Australia’s metro markets, prices in Cairns’ top-performing suburbs have spiked by up to a third since last year.
Exclusive quarterly home price data from PropTrack shows apartments in Manunda, Holloways Beach and Edge Hill recorded the strongest annual growth, each up 29 per cent year-on-year.
The data shows the region’s top 10 annual hotspots were all unit markets, ranging from Woree where apartments surged 27 per cent to a median of $361,968 to Trinity Beach, where an uplift of 25 per cent took the buy-in to $571,836.
The region is riding on big demand for affordable housing
For houses, East Innisfail led, with 24 per cent annual growth to $398,159, then White Rock, up 21 per cent to $544,270.
The resort town of Port Douglas was the region’s only suburb where prices went backwards over the past 12 months, shedding about $50,000 to $1.02m.
The drop was mild compared to some of the state’s other prestige markets, where a shift to a two-speed market saw luxury house prices fall up to 9 per cent in Brisbane’s inner-city New Farm in the last 3 months alone, and 6 per cent in the Gold Coast’s Surfers Paradise.
Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said the data reflected a market divide.
REIQ CEO Antonia Mercorella: Two-speed market
“Competition for housing is intensified around the lower quartiles of the market where affordability is greatest and its perceived potential gains are highest, and this demand tapers off as you move up the price spectrum, reflecting an increasingly divided two-speed market,” Ms Mercorella said.
She said dire labour shortages and low productivity meant supply issues would continue to put a floor under the more affordable brackets for the foreseeable future, with dwelling approvals currently running about 13 per cent below target across the state.
Ray White Group chief economist Nerida Conisbee warned this structural housing shortage was being severely compounded by re-emerging global supply chain pressures that threaten to cripple the local construction sector.
Ray White chief economist Nerida Conisbee
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“The escalation of conflict in the Middle East is contributing to higher fuel costs and renewed disruption to shipping routes, which will flow through to increased material and construction costs in the months ahead,” Ms Conisbee said.
She warned that while the prestige end of the market was cooling, the underlying affordability crisis was only going to worsen.
“What we are seeing is not an easing of the housing shortage, but a shift in how it is playing out,” she said. “Slower price growth does little to offset the fact that new housing is becoming more expensive to deliver, limiting supply and placing upward pressure on prices over time.”
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