Cooktown & Cape York Property Newsletter

Our new Autumn 2024 Cooktown region property newsletter highlights several exciting opportunities for prospective homeowners and investors. This season, we’re featuring a range of new properties that cater to diverse tastes and budgets, from cozy residential homes to expansive rural estates.

New Properties on the Market

  1. Charming Family Homes: Ideal for growing families, these properties offer spacious living areas, modern amenities, and close proximity to local schools and parks.
  2. Rural Retreats: Perfect for those seeking a peaceful lifestyle, our rural properties provide vast landscapes, ideal for farming or simply enjoying nature.
  3. Coastal Properties: Located near the beautiful coastline, these homes offer stunning ocean views and easy access to beaches and water activities.

Reasons to Move to Cooktown

  1. Natural Beauty: Cooktown is renowned for its breathtaking landscapes, including the Great Barrier Reef, lush rainforests, and pristine beaches, making it a haven for nature lovers.
  2. Community Spirit: The tight-knit community in Cooktown offers a welcoming atmosphere with numerous local events and festivals that bring residents together.
  3. Historical Significance: Rich in history, Cooktown offers a unique cultural experience, from the legacy of Captain James Cook to the town’s indigenous heritage.
  4. Relaxed Lifestyle: With its laid-back vibe and slower pace of life, Cooktown provides an ideal environment for those looking to escape the hustle and bustle of city living.
  5. Growing Opportunities: As a developing region, Cooktown offers potential for investment and growth, with new infrastructure projects and business opportunities emerging.

For more details on these properties and insights into the Cooktown property market, you can subscribe to our newsletter quarterly updates HERE.

RED Alert – Summer property newsletter

After the past few weeks of sales, we have been flat out with property transactions. Seven contracts in three weeks have kept us on our toes. Therefore we have just updated our quarterly Cooktown & Cape York property newsletter which can be downloaded HERE. Check out the new section to the rear with Cooktowns

Cooktown & Cape York Property for sale

Property pricing and getting it right from the start!

The prices realised for houses in Far North Queensland particularly Cairns, Port Douglas & the Atherton Tablelands in 2021-22 were some of the best ever seen. Each month the market moved and vendors, sellers, agents & even valuers had to hold on tight for the ride. Sellers were in a position of being able to test the market with ambitious prices. More often than not these punts worked to their advantage and in many cases were exceeded.

The REIQ Zone chair for Cairns, Tom Quaid suggests that “despite the market remaining buoyant, many sellers state-wide are missing the mark when it comes to setting the right price for their property. An error that is becoming more expensive as we head into an error of uncertainty. The pace of growth has slowed and expectations need a reset. This is not to say the market has gone backward as it has not. With price consolidation comes the need to be realistic. So more than any time in the last 2 years getting the price upfront or responding quickly to feedback from buyers and agents” as your campaign progresses. No enquiry or feedback is also feedback in itself. If you don’t react to these signals your property could be sitting on the market for some time.

Cooktown Charlotte Street

The prices realised for houses in Far North Queensland particularly Cairns, Port Douglas & the Atherton Tablelands in 2021-22 were some of the best ever seen. Each month the market moved and vendors, sellers, agents & even valuers had to strap in for the ride. Sellers were in a position of being able to test the market with ambitious prices. More often than not these punts worked to their advantage and in many cases were exceeded.

Tempering expectations is made easy today, as at our fingertips are numerous online tools. These need to be used to substantiate your estimated price on your property. You can be sure buyers are using these tools to assess their options when buying. This is why it is important to get your price right from the start!

As the property downturn across more Australian housing markets, both buyer and seller activity has softened

by Eliza Owen – CoreLogic – Head of Residential Research Australia

However, demand for housing finance across owner occupiers that are not first homebuyers (i.e., subsequent buyers defined as upgraders, movers and downsizers) appears to be fairly resilient in the rising rate environment.

Using ABS housing finance data to July, we can see how different buyer cohorts are reacting to the market downturn. Figure 1 compares the value of housing finance secured for the three main buyer classifications: first homebuyers, subsequent buyers and investors.

The chart shows housing finance secured by each group relative to April 2022, when national home values peaked. Since the rate tightening cycle started in May, investors and first homebuyers have seen much faster declines in housing finance secured than subsequent buyers.

This may be because subsequent buyers are less sensitive to lifts in interest rates. Using the sale of an existing home to fund their next home purchase, subsequent home buyers would likely need to take out less debt than first homebuyers, thus being less affected by rate rises.

Meanwhile, investors are likely to be more sensitive to a lift in rate rises. Although investors can offset the expense of higher interest rate payments as a tax deduction, investors are typically more leveraged than owner occupiers, and have inherently higher mortgage rates.

How have buyer cohorts behaved in the past?

Figure 2 (see below link to full article) looks at how lending volumes among the different cohorts have changed amid historic downturns since 2004 (where the ABS lending data series commences 2003).

The main difference between the buyer types over historic downswings is that first homebuyer demand for finance has traditionally been more resilient through downswings, with subtler declines in demand, and during some periods, increases. Subsequent homebuyers and investors have seen a more distinct decline in demand for housing finance initially through downswings.

For the full article see https://www.corelogic.com.au/news-research/news/2022/how-different-buyers-react-to-the-housing-market-downturn?utm_medium=email&utm_source=newsletter&utm_campaign=20220919_propertypulse

Higher interest rates and high inflation weighs further on housing demand

A really interesting article by Tim Lawless of CoreLogic regarding interest rates, inflation and demand. In Cooktown we have seen a reduction in general enquiries but sales remain static which indicates that our property market did not quite heat up like properties in the southern metro regions.

Here is a link to the full article here https://www.corelogic.com.au/news-research/news/2022/higher-interest-rates-and-high-inflation-to-weigh-further-on-housing-demand

When to call a peak in housing values

Australian housing values grew 22.1% last year and the market is showing signs this extraordinary rate of growth – not seen since the 1980s – is slowing across most of the capital cities.

Yet as the rate of dwelling value appreciation slows, capital city and broad ‘rest of state’ markets are yet to peak, causing plenty of speculation about whether this will occur in 2022 and mark the start of a downturn. 

CoreLogic’s Research Director Tim Lawless explains when a market has peaked, the biggest factors impacting Australia’s housing in 2022 and the trends property watchers should be keeping an eye on this year.
 
When to call a peak in housing values

“To categorise a market peak across a region, we would generally be looking for a consistent trend in negative monthly movements,” Mr Lawless says.

“To date, the quarterly trend remains positive across the major regions, with the only exception being Darwin houses, which is the only capital city housing sector to record a negative quarterly change. 

“The Darwin reading can be more volatile than other cities due to the small size of the market, so it may be too early to call a peak in this market even though the quarterly growth rate has turned negative.”
  
Peak vs peak rate of growth

“Although we can’t see any evidence that specific housing markets have peaked, it is clear that most markets have moved through a peak rate of growth,” Mr Lawless says.

“What I mean by that is the point at which markets achieved their biggest monthly growth rate. We saw most of the capitals moved through a peak rate of growth around March last year.”

•    Sydney’s monthly growth rate peaked at 3.7% in March and has since reduced to 0.3%
•    Melbourne’s monthly growth rate peaked at 2.4% in March, reducing to -0.1% in December (the first monthly decline since Oct 2020)
•    Perth’s monthly growth rate peaked at 2.7% in February.  After recording only a single month of decline (-0.1% in Oct 2021) the monthly rate of growth has reaccelerated to reach 0.4% in December
•    Hobart’s monthly growth rate peaked at 3.3% in March and dropped to 1.0% in December
•    Darwin moved through a peak rate of monthly growth in April at 2.7% (0.6% in December)
•    Canberra moved through a monthly peak in March at 2.8% (0.9% in December)

Market exceptions and future expectations

“The only broad regions avoiding a slowdown in the pace of growth in housing values are Brisbane, Adelaide and regional Queensland,” Mr Lawless says.

“These markets are benefitting from a healthier level of affordability compared with the largest capitals along with a positive demographic trend and consistently low advertised stock levels.” 

“We could see our two biggest capital city markets Sydney and Melbourne hit their peak later this year although the timing is highly uncertain and depends on a broad range of influences.”

Three main factors that determine when and if a market peak will occur

“There are a lot of moving parts that will affect the trajectory of housing outcomes,” Mr Lawless says.  

The three biggest factors to impact market movements are: 
•    Policy-related factors such as interest rates and credit availability 
•    Market factors like the trend in advertised stock levels and housing affordability 
•    Economic factors such as labour market conditions and wages growth

“Arguably, the surge in COVID cases associated with the Omicron variant could push some of these policy tightening decisions back, with APRA or the RBA unlikely to tighten their policy settings with so much uncertainty associated with the latest case numbers,” Mr Lawless says.

“There is also some downside risk from a delayed economic recovery associated with less spending activity and heighted uncertainty, although a slower than forecast economic recovery implies rates would stay lower for longer.” 

Key signals that a market is approaching its peak

“Normally, housing growth trends will gradually slow before moving into a correction phase, which is what we are seeing at the moment. However, this isn’t always the case. During periods of shock such as the GFC or early in the pandemic, housing trends turned quite sharply into negative territory,” Mr Lawless says.

Other signs to watch for include:
•    rising advertised stock levels
•    affordability constraints
•    weakening auction clearance rates
•    softening vendor metrics such as longer days on market and larger levels of discounting

“It’s fair to say we are currently seeing a softening in all of these metrics, albeit from an historically high base,” Mr Lawless says.

“We also consider macro factors, which could have an impact on housing demand such as the potential for higher interest rates or tighter credit policies. Both of these factors have a high level of uncertainty at the moment, especially considering the latest wave of COVID cases associated with Omicron which could weigh down economic activity.”

Jan13_2022_PropertyPulse_1.JPG

What to expect following a market peak

“Once a market peaks, the typical trend is that values will experience a period of decline,” Mr Lawless says.

“The duration and severity of the decline is dependent on a broad range of both macro and micro factors.”
 
Since the late 1980s, Australia has experienced national downturns that have ranged in severity from a 1.0% peak to trough decline in 2015-16, a temporary correction following the first round of credit tightening via APRA’s 10% speed limit on investment lending, to the most recent 8.4% decline experienced during the 2017-19 downturn.

At a capital city level, the most severe downturns have followed periods of exuberance such as the mining infrastructure boom in Perth and Darwin where housing values in Perth fell by 20.0% over 64 months (moving through a peak in June 2014 and finding a floor in October 2019). 

In Darwin, dwelling values fell 32.7% over 69 months (May 2014 to February 2020), although both downturns were preceded by a spectacular upswing in values. 

Jan13_2022_PropertyPulse.JPG

The above article is 100% from CoreLogic the national real estate data organisation RP Data.

https://www.corelogic.com.au/news/peak-peaking-peaked-how-read-australias-housing-market?utm_medium=email&utm_source=newsletter&utm_campaign=20220117_propertypulse

Southern Investors eye off Cooktown

Interesting to see southern investors eyeing off Queensland’s northern frontier township Cooktown. Commercial and residential inquiries are strong and contracts are processing. If your heading north, make sure pack your wallet!

Set to be the location of a greatly enhanced Queensland Health facility, the Cooktown Hospital is bringing in new employees and creating jobs for locals part of a long term strategy for the facility and region. The budget for this has been recently released by Queensland Health. This will places a great deal of pressure on the rental sector, yet creating more opportunity for investment in the residential sector. Meanwhile property investment group BInvested are under contract with the Cooktown Motel /Pam’s Place – Backpackers establishment. Others include large Queensland companies looking around and doing due diligence here along with small southern investors like TTV Australia looking for a long term strategy for investment in the region. Nearby Lakeland, currently the economic driver of the Cook Shire, is forging ahead as the regions food bowl and major employer. High volume producers Red Valley, Swiss Farms, MacKay’s Bananas and Collins Family employ large workforce’s with excellent production of bananas, avocado, papaya, passion fruit, organic beef, pork, and coffee to name a few. This is further stimulating the desirability to live on Cape York with year-round work and opportunity.

Snap lock downs can miserably disturb the most well-prepared travel arrangements. Travelers coming unstuck due to snap lock downs, boarder closures and quarantine restrictions is putting some people off travel to anywhere. All that said Queensland’s Cape York is bracing for a bumper winter tourist season possibly starting as early as April 2021. February & March are the wettest months of any year and punters are already out and about. With the wet now well advanced, Cape York is enjoying its great soak before arrival of the stunning winter. The winter will bring many road travellers wishing to escape, resulting in a long-awaited boast to the tourism sector.

Further stimulating regional visitation will be the Rising Tide festival held in Cooktown combined with the hugely popular Laura Dance festival held at Laura, the Laura rodeo/races/camp muster, and music festivals BMUP & Wallaby Creek Festival in Rossville all events retelling a combined Australian story from a Cape York perspective.

If you are looking to escape the pandemic madness, move your business and life to the Cooktown region, you won’t regret!