Shock postcodes revealed: Where Cairns investors are losing big

17 hours ago 1

Cairns CBD is among areas where more than 40pc of investors told the ATO they were negatively geared. Picture: Brendan Radke

More than 40 per cent of property investors in a dozen Far North Queensland postcodes are writing off losses via negative gearing, with one area rising to more than half losing money on rentals.

Over $102m in net rent profit was reported and $45m in net rent losses from individuals according to fresh analysis of FY23 data released by the Australian Taxation Office – based on tax return statements filed by individuals, and excluding those who may be using company names to hold property.

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Real Estate Institute of Australia president Leanne Pilkington.

It found 4859 covering South Johnstone in FNQ had the most extreme net loss result with 57 per cent of investors negatively geared, though it was off a small base of 24 investors claiming net rent losses on tax returns.

Several surprise areas were included among those with the highest level of investors reporting net losses around Cairns and Far North Queensland such as 4869 – just south of Cairns including Edmonton and Bentley Park, and 4870 – covering Cairns CBD, North Cairns, Manunda, and Parramatta Park. Other postcodes included 4878, 4879, 4852, 4855, 4849, 4882 and 4854.

The data found the postcode with the greatest percentage of investors living in it in the area was 4884 in the Atherton Tablelands where 17.26 per cent of locals filing tax returns told the tax office they received rental income. Most of those were believed to be residential or commercial property income, though it could also cover vending machines, jetskis, or anything else that can be rented out.

Real Estate Institute of Australia president Leanne Pilkington said the standout from the data was that few would be considered overly affluent.

“I’m surprised by the areas, they are just not high-net worth areas,” Ms Pilkington said. “The conversation is always around rich landlords and this data is demonstrating that the landlords really are just mum and dads.”

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Millennial multi-millionaire Arjun Paliwal runs InvestorKit, which helps buyers pick strong rental properties to build financial freedom. Picture, John Gass

InvestorKit CEO Arjun Paliwal said buyers looking to invest in 2025 were still coming from a wide variety of classes, despite the surging cost of living making it harder to buy a home.

“The majority of property investors we see are your everyday mums and dads in suburban capital city environments,” he said.

“They’re looking to build wealth, protect financial interests, and they see property wealth as a good market to do so.”

Mr Paliwal said while property markets were growing tighter, buyers looking to invest were still able to get ahead by buying in outer areas.

“A big mistake is that people [only] go in their backyard, or they end up buying units,” he said. “Being borderless is one of the biggest reasons most investors are able to have success, because they’re able to understand what’s happening around Australia; able to make sense of what’s happening in different locations at different times.”

The two postcodes for Queensland’s top three suburbs record a combined $2.8m in net annual rent, with the 4155 postcode of Chandler at $1.3m and Mackenzie-Burbank’s postcode of 4156 at $1.5m.

Moranbah in regional Queensland was a shock result, with the area reported to receive a net rent income of negative $2.5m.

“Mining towns [often] have a newer tenure of investors,” Mr Paliwal said. “They may not live in this area for long; the population might be transient, the locals might be in and out … and as we know, the start of your investment journey is highly negatively geared.”

The data was broken down after analysis of records from the 2023 financial year.