The Cairns Property Market in 2025: What Investors Need to Know About Rentals, Supply and Where to Buy

Welcome to Property and Mortgage Insights Australia 2025. I'm Virginia Graham, your host and also a mortgage broker. Today we're going to talk to Linda from Property Ladder. Linda is one of the most experienced rental managers in the whole of Cannes. She's an expert at Airbnb.

She's also an expert at traditional rentals. And with over 20 years, 25 years experience, I don't think there's too many people that know more than she does. Welcome Linda from Property Ladder. Thanks for joining us today. Thank you.

So with the cans property market we're at stands today and what investors need to know today, like where has it been recently and where do you see it headed in the future? The canns market is completely different to every other market in a major capital city. So Cairns generally is a set and forget I guess is the word that I'd like to use. It is your passive income. It's the total in the race.

You know, she's slow, she's steady, she just plods along. Whereas Sydney is all those capital cities you buy, you've got that accelerated capital growth. You may get the income, but Kes is your slow and steady. Keyn has had a rough trots after the gfc. We did have a really bad trot.

We, you know, had issues where the main builders all went broke. We had a population loss and therefore we had basically the properties went backwards in value. In the last four years we've reached where we were in 2007, 2008 and we've surpassed that. Now the ring tools have just gone to levels that I didn't think I'd see. So that the rentals have gone up.

Where is it now? It is much higher than it was but it's very comparative to say if I get say a four bedroom, two bathroom house here, you know, your family home and I put it in WA here, you're probably going to pay about $600,000 in WA for you know, equivalent 1, you're paying 1.2. So your entry level is a lot lower. So how would you know? I think you told me how to tell how many properties of for sale in the whole of the canirs area and how many rentals are in the whole of the cans area.

Sure. The way that I do it is realestate.com. that's the thing that's used here the most. You know, some of the other ones are around but that is the main one here. So I just go to real estate.com and I search either for sale or to rent And I just put canns great region.

It will then tell you how many properties are for sale. You can then narrow it down by putting your criteria in. At the moment there's about 300 rental properties and that's everything from a room in a shareous. Right. Way up to your executive home.

So there's only about 300, a population of I think we're close to 170 now, which is not a lot. Not a lot. Not a lot. With Airbnbs, there's not a lot of them either, is there? Not really, no.

No. They're mainly confined to and this is broadly speaking the city area. So somebody that's going to be staying and doesn't want a car wants to be no more than 2km from the city centre maximum or the beaches. So that would be, you know, your Holloways, your Trinity, your Palm Cove, they will need a car and there's a lot of holiday let Airbnb in the beaches and the city. Generally speaking there's not a lock in the suburbs.

So with, you know how you said there was about 300 properties for rent, is that houses as well as. Absolutely. So that's everything. That's everything. That's not verying.

It's not at all. The rental market is incredibly tight. Yes. You know, historically we'use we'll use a two bedroom apartment, you know. Yes, your basic one in Menunda.

So your two bedroom apartment used to rent way back in the day for about $250 a week. You know, it slowly crept up, went to 300, 3:50. The one that I've just rented, it'gone for 4:20, you know, so it is a massive difference in the price. Massive. You know, your one bedroom units now renting between 350 and 370.

And this is your very basic simple Menundam menorah type of property. Beds, seats are very popular. There's not many of them but they're popular and they're about 3:30 at the moment. A house you're looking at anywhere between 6do and $800 depending on the number of bedrooms, the other facilities and the location. The other one, that's that in between ground between.

Going from a unit to a house is a duplex and a duplex generally has a yard and generally you can have a pet and they're sitting around the 474L80 mark per week. And then how do you calculate the raten? You were telling me before when you were re assessing a tenant, it's got to be percentage of their Income. Yep. So best practice says that I should rent to somebody with the all the applicants no more than 30% of their net income.

So if you know you've got two people and they both earn thousand dollars each net, you know their capacity would be $600 a week. Ish. So's their net. It's their net income, not their gross. Wow.

Yeah. So percent of. Yeah. So you know, it makes it really tough for someone that say an apprentice who's bringing home, you know, not a lot of money. So say somebody's earning $1,000 net a week, the maximum they can rent is $330 a week maximum.

So that means they're restricted to a beds set or they have to share. So the demographics are changing. Oh yeah. Can we talk about the demographic shift? Yeah, yeah.

So historically you know, you would be, you know, 18, 19, 20 and you want to leave home and so you get your, and then you go and get a little unit and basically you might find a partner and then you upgrade to a two bedroom unit and then if you have children you go to a house. Well, the affordability, because the rents have increased so much, the affordability isn't there. So rather than a person going and renting a little one bedroom on their own, they may have to go in with a friend. So the demographics are, they change. You don't have place on your own.

A couple might have wanted a two bedroom unit so that they've got a spare room for someone comes or a study or something like that. Again, the affordability isn't there because the pressure is not just on the rent, it's on everything else. So therefore they might have to ren with another couple. So the demographics are changing. Mum and dad, you know, they might not like it but they might need their adult children to stay at home to be able to afford the place that they need.

So there is that, that changing in demographics of the way that, that people are living. You know, in England, you know, you may have four generations of family, you might have grandma mu adult child and a grandchild, you know, so there's that chang in demographics because the affordability. Yeah. So if someone was a young person now and they get their first job and they're on quite good money for a first job sort of thing and they wanted to buy their own place. What do you see them doing now?

Have you seen this it orchus? From our perspective as mortgage brokers, we've mostly the clients sust stay at home longer, saving more money and then doing it rather than. Yep. Buying them. Are you seeing people actually buying them and getting friends to rent or something?

No, and they should be. I what I, I try and mentor as many people as I can. So I had a, a young fellolw that came to me that was renting a place and he said oh, I really want, you know, this, I want a house and I want this, but my deposits only that and I can't get there. And I said to well you need to adjust what you can get. So it's better to be in the market than it is to be renting because you don't know the cost increases there.

And I said and the second thing is that by the time you reach your deposit level the prices have gone up so you can still only afford that. So you know, my advice to someone that's young is adjust what you can get. You know, it's great to be able to get, you know, four bedroom, two bathroom, double lock up, garage, pool, you know. But if you can't afford that, at least get into the market. Even if you don't live there, use it as an investment, you know, you can still buy some great investment properties.

You know, little beds here is going for around 200,000. One bedroom at the moment, you can pick up a good one for about 250,000. So if you can't afford it, know at least buy something. Yeah, just get into the market so you can get the capital growth and the income correct. Yeahre.

Yeah. And what do you so compared to Canirns compared to other, we've talked about Canirs compared to other parts of Australia. Yeah, but also just between the different things, you could buy the beds, sit the two bedroom, the duplex or the unit blocks or the house. Where are most people, what are most people buying now? Like what are you, what are people able to buy?

Because the market seems quite limited. The market has gone up. So what I've seen over the last probably four to five years is that people's expectations were that I'd love to buy a house, you know, four bed, two bathroom. Then they've gone okay, well I can't afford that because I don't have the lending capacity. So therefore I'll get three bedroom, one bathroom on the south side.

And then the prices have gone up from there as well. Then they've gone okay, well I'll buy a duplex half, well the price has gone up for that as well. And then they slowly work their way down and then they went what I deemed to be called owner occupier friendly strata Units. So that would be something like a townhouse with a courtyard or a ground floor unit with a courtyard or something in a gated resort. And obviously they've increased now.

So what I'm seeing now is historically when we were selling strata units, because that's our forte, when we were selling strata units, it would be 90% of investors and 10% owner occupies. If that the market is now switched because nobody's got anywhere to live because the rental market'so tight that basically they will then it'll be 90% owner occupier and maybe 10% investor. So we don't have a lot of investment. So because you do mostly rentals for investors because I imagine if they're off they would t you mostly deal with the investors. So what are you mostly dealing with in two bedroom unit investors or Airbnb or.

So we've got a mix between the Airbnb and the normal rentals. With the rentals it really comes down to the criteria or investment strategy that that investor has. Lots of people have different investment strategies. So we do have houses, we've got duplex pairs, we've got units and we do have Airbnb. What is good for somebody is not necessarily good for another person.

So if you're looking at, you know, higher income, higher risk, Airbnb might be for you. If you're looking at a slow and steady mum and dad little investment that you set and forget, you know, it might be a little one bedroom unit in Menanda. So it really does vary. Speaking Menanda, I think you were mentioning before to me about the 3M suburbs and the W suburbs. Can you tell us a bit more about those?

So I grew up in BCADA and that's in WA, 20 minutes north of the river. And in the 80s all the governments around Australia did the exact same thing. They basically developed, you know, close to town big blocks and they did social housing. So they did Department of Housing Housing. They, they built literally house after house after house in entire suburbs.

And they quickly discovered that that social experiment didn't work because, you know, it was like, well, for me it was like, don't go to that area. You know. They then started to sell those off in the late 80s, early 90s. They got solted to people to either owner occupiers or they were then sold on to investors which then demolished say three houses in a row and then basically built block units and Menanda, Menorah, Mble forgot the last in those three suburbs were and White Rock and worry were the suburbs that The Queensland government decided to use as social housing so all the big blocks were sold off. Lots of owner occupier have come in, they've come in, you know they've been there for years, they've made the places great.

A lot of houses were tumbled over and we had in Menunda in particular the big three storyey high rise high density unit developments that were done there and what's happened in say Balga is it's completely different suburb so you can't say well Balga's a no go zone because it's now Westminster. They've veryanded and it's fantastic. Same with Menunda, Menorah and Morle. You know they, they've basically changed that suburb. There's still streets that you wouldn't want to probably go to but as a whole suburb it's completely changed.

So you know that that isn't what it used to be. Yeah. So is there when you mention within, you were saying within two to four kilometres of the city which one of those suburbs are, are any of them within 2-4 km the city or are we talking only the area zone actually cans. So when they did the units in particular the areas that they went to was pretty close to that 5 kilometer mark. So they went out sort of like as far as Earlville, Menunda, Menorah, Edge Hill, W.H.

whitefield, that sort of inner circle of 5km. There were some that were in Worree and White Rock, not a lot, there were some in Bentley Park, Edmonton and Gordonville but the great majority of them were closer to the city like so when you go to Springfield Crescent or Grant Tala that whole area is hiked in city apartments so and that's approximately four kilometres from the city cent centre. Yeah, that's co town and so right now if you were buying properties in Canirs what would you buy then? I would look at what my investment strategy is personally you know I love strata units. The reason being is you know if I'm going to buy say a house and the house is going to cost me 600,000 do I could potentially buy you know two, three units depending on what I want and therefore if one is empty I've still got two.

If I want to sell one, I can sell one I can't sell, chop off the garage and sell the house, you know part of the house. So that's the strategy. What I would be looking at is a really good well managed, well financed body corporate so something that's got money in the sinking fund that is well maintained. So therefore the money'there for future works. Not something that's falling down that has no money in the account.

Also the area, you know, something that will went well residential because the rents have gone up so much. You know, there is that juggle between is it better to keep it residential or do you take it to Airbnb? I personally think that Airbnb is only for certain locations and certain types of properties. Yeah. And so we'll do a deep dive on Airbnb and be.

Because I'm very interested to know more about that. But while we're on the unit strategy, which units would be better than a two bedroom a beds sit? Like if everything else is equal would are you better off to get like 2 beds sit or 12 bedroom or duplex or which. Which one of those would you go for?

Again, it depends on your investment strategy. So a lot of people like Dulex halves. They like the control of not having a body corporate. They're prepared to do the work. They don't, they just don't want any aggravation.

So duplex half is a great option at the moment. You could probably pick one up for around the 750 mark and that would be two bedroom apartments each side potentially should rent for about 470 to four doars eightys a week. So it's a good return. Personally I like strata units and I like small. You know bedts are fantastic.

They're 40, 42 square metres roughly. They rent for $300 a week. Generally they're in a bigger complex. So when you've got a bigger complex with body corporate it it is spreading the cost down. So I'll give that in the context.

So if you've got a swimming pool in the body corporate it's going to cost you between 5 do and $6,000 a year for that pool. Because you've got the servicing the chemicals, you've got the potential for equipment failure and then you've got the electricity. So it's going to cost you $6,000 roughly. If you've got 10 units, each owner is going to have to pay through their body corporate $600 a year for the privilege of that pool. Whereas A Bit Sick is in a block of the one at Palm Trees is in a block of 44 units.

That pool still cost $6,000 but that cost is spread equally between 44 units. So the cost of having the pool there is much, much lower. Body Corporate is something that's you shouldn't be afraid of, you know, a well Run body corporate can be great. So yesterday I did the AGM papers for City park and City park has got 39 apartments. We've just painted the outside which was about $70,000 which we had the money in the bank.

And then you have two components in your body corporate. So essentially you have your administration fund which is your day to day running. So that is your pool servicing, your electricity, your insurance for the building itself allowance to have the gutters clean, the pressure cleaning, the electrician, you know, a whole weap of different things. Then you have your sinking fund and your sinking fund is for future works. So for this body corporate that I did Yesterday, we've got 100, nearly $140,000 in cash waiting to be spent.

So the owners are slowly putting a little bit of money aside every, every year. And they're building, we're building that fund so that when the roof needs to be replaced we should have the money sitting there. We don't have to go to the owners to say roof needs to be done. You need to pay $50,000 each. So that's quite terrifying.

So a well rung, well managed body corporate is a great investment. Yeah. So if you'got the good body corporate then those units would. And then out of those units, what do you think between the beds sit and the two bedroom? Why would you pick the beds sit over the two bedroom?

Is it because it's cheaper to buy and easy to run or like what was. So I have, I'll put it into a case. So I have a friend that wanted to buy a unit and the criteria is quite open. We just want to buy really good investment. So we're open to a beds set, we're open to you know, one bedroom or a two bedroom.

And it's just monitoring the market and knowing what comes up and then picking the best one. So we managed to pick her up a two bedroom unit in Menanda for $270,000. Now she got a great buy. She got a fantastic buy, you know, because you know the market probably should have been higher but the agent listed it lower. She got it for that price so you know she's, she got a great buy.

In that instance, it was better to buy that at 270,000 than it was to buy say a townhouse, a one bedroom townhouse which is the same price but I rented her for 420 whereas the other one I'm only getting three do hundredl fifty. So this for me it's not either one. Depends on your budget. It depends upon what's available. I wouldn't pay more for the beds sit Just because it's a beds sit.

That's, you know, it's. It's. It's like any real estate. You buy the best that you possibly can for the least possible price.