It’s not a secret that Australia’s property market has been very busy over the past 12 months and with interest rates at an all-time low and many families seeking sea changes, investing in property in Cairns could turn out to be a boom in years to come but is now really the right time to buy an investment property in Cairns?
Cairns’ property market
Cairns’ property market has experienced significant growth over the past 12 months, with both units and houses gaining in value. More importantly, for investors who are seeking to capitalise on people’s desire to relocate to coastal areas, the rental vacancy rate hit a historic low of 1.2% in the first quarter of 2021, meaning that there are very few rental properties available. This figure has been dropping since March 2020, which could indicate that a foray into the Cairns property market could prove very fruitful for investors on both rental yield and for capital growth.
When is the best time to buy an investment property?
Although the property market is often referred to as being ‘cyclical’ and economists and property industry experts may offer up their opinions on ‘good’ and ‘bad’ times to buy, your own circumstances should determine when you buy. Although there are certainly times when the market is high and the market is low, your personal finances are the most important thing to consider when it comes to timing.
There are pros and cons to the current situation. On the one hand, interest rates have stayed low and Australia’s economy is strong. The property market in Australia will always be steady even if it is not booming and people’s desire to live a more balanced and flexible lifestyle means rental properties in coastal cities and towns are being snapped up and for higher weekly rates than their city counterparts.
If you are the type of person who has taken the time to educate yourself on the property market, the projected rental yield and/or capital growth of the type of investment property you want to buy in Cairns, saved enough of a deposit, and are certain you will be able to service the mortgage on an investment property in Cairns then now could be the perfect time to consider purchasing an investment property.
Within Australia’s overall property market lies thousands of smaller submarkets that all have their own way of performing depending on their own demographics and local economies. Cairns, for example, is experiencing growth because it offers a laid-back, tropical lifestyle and housing is still affordable for a lot of families. With many Australian and international companies allowing staff to work from home permanently, a sea change has never looked better for families in other parts of metropolitan Queensland and even those from interstate.
If you are planning on investing in Cairns’ property market then you should look to buy in suburbs with indicators that point towards future growth. Consider areas close to schools, shopping precincts, public transport, and other major infrastructure. If your long-term goal is capital growth rather than relying on a strong rental yield then research up-and-coming areas where infrastructure is planned but has not yet been implemented as these areas may be cheaper now but highly sought after in the future.
In essence, the best time to buy an investment property in Cairns is when you are personally ready to do so, without your financial situation being adversely affected.
For more information about purchasing a property, speak to one of our conveyancers today.