An information site for people about Cairns, Australia
If this is your first time living in Cairns, you would be forgiven to ponder this question for many, many hours. After all, there are many factors to consider when you are buying property . There are even more if this is the first time buying in a new area, or just the first time ever.
Questions you might ask yourself are:
When I first came to Cairns, my fiancé and I didn’t have an answer to any of the questions above. So if you’re in the same boat – this is perfectly normal. We were also able to share a house with family for a few years while we familiarised ourselves and got ourselves established with employment and the like. The good news is that house prices don’t change drastically overnight so this takes the pressure off while you do your research and set yourself up.
Don’t be fooled by property markets in capital cities – Cairns’ property market fluctuates with different market influences than what exists in capital cities. That being said, there are also common market influences such as supply and demand, interest rate etc etc. The main market influences in Cairns are: Tourism, Employment (affected by Tourism), Fly in / Fly out residents, Regional industry, Government spending, Population.
Employment is a huge factor in regards to property prices, but population drives both Rental market and property price. Cairns is a place where people stay, even if there is low employment. After all it’s one of the greatest places to live. Cairns population tends to stay on a steady growth trend, but there doesn’t seem to be a lot of development (as at June 2013). At some point this will affect the supply vs demand ratio. We have already witnessed a rise in rental prices this year and a decrease in interest rates. All I can suggest is to do your maths – work out how much you’ll be repaying on a mortgage vs Renting.
The suburb plays a part in purchase and rental prices. There is an article on this blog that explains more in depth of the different suburbs in town. TIP: Whether renting or buying, avoid the really cheap suburbs – it’s just not worth the hassle. When in doubt, go for a walk and introduce yourself to your prospective neighbours and get the goss about the neighbourhood. Don’t take the agent’s word for it.
Personally, as long as the house has an Air-conditioning unit you have satisfied half the criteria for a suitable house in Cairns. If it doesn’t, either negotiate a discount and then spend a few bucks to put one in, or; TIP: get the owner to put in a decent Aircon unit and adjust the sales price accordingly by whatever the installation cost is – this will save you some up-front cash since you will probably be getting a loan. On a side note- Daikin aircons are simply awesome.
I’m not going to get involved in tips that involve your finances. The above suggestion about the repayments vs renting is really all I can offer before I need to mention any disclaimers. Certainly, if you work on your maths, you will be able to answer most of the questions above anyway. In particular, the ‘Do I want to pay someone else’s mortgage or get one of my own’. It may surprise you if you rent a house for $300/wk, at the end of 12 months lease, you would have shelled out $15,600. At least if you had your own mortgage, you get something back at the end – a house!
You might be wondering though, what’s the Rent-Try-Buy all about? Well, the concept is not that different than a Radio Rentals program on white goods. With Radio Rentals, you can rent a washing machine – and if you want to, you can make repayments to buy the thing. Overall you would have paid more rather than buying up-front, but at least you can cancel the agreement any time and move on should the machine not suit your needs. Hence the Rent-Try-Buy.
What you may not know is that you can do the same with a house. You can approach the landlord and find out if the owner is willing to sell the property and work out an arrangement to buy the property if you want to at the end of the lease. It might have to be a long lease though, and you may have to pay a little more rent. If you play your cards right, you may be able to negotiate that some (or all) of the rent pays for deposit at the end of the lease. TIP: With Cairns market in its current state, many landlords would likely welcome someone who wants to buy their house for a set, agreed price today and still pay rent. This might be a solution to the ‘Do I have enough deposit’ question above as well.
At the end of the day, the property market in Cairns isn’t going to race away any time soon so you have plenty of time to mull over any questions you have and to do your own due diligence. I have personally been on the receiving end and the dealing end of the Rent-Try-Buy concept, as well as buying off the plan, buying your average 3br home the traditional method, and of course renting. If you are interested about the Rent-Try-Buy but have no idea what to do, please comment below and I might be able to help in some way.