Postcode Grids & Regional LVR Capping Rules

Virginia Graham Riches: Welcome to Property and Mortgage Insights Australia. I'm your host Virginia Graham, a mortgage broker, and today's topic is luxury property in regional areas. I'm here with Jenna Shingles from FNQ Hot Property — she handles luxury property in Cairns, so if you're after a luxury home up here, she's the person to see. Welcome, Jenna.

Jenna Shingles: Thanks, Virginia. This is a specialty area for FNQ Hot Property. We've gravitated towards the Blue Water canal estate because it lets you keep your boat at the end of your own jetty, with deep-water access out to the Coral Sea and the Great Barrier Reef. It's the only canal estate in Cairns. We've lived here ourselves for sixteen or seventeen years, in a couple of waterfront homes, and we think it's the best place to be in Cairns.

Virginia: It's a lovely spot — and not just for boats. There are great walks too, aren't there?

Jenna: There are — Earl Hill, and Half Moon Beach, a beautiful isolated beach where the boats head out before the ocean. It's very quiet: there's the Blue Water Marina, a restaurant area, and it's close to Cairns — about halfway between Cairns and Port Douglas, with a shopping centre five minutes away. There's also world-class mountain biking up behind Smithfield, near James Cook University, and they're connecting up the bike paths all the way to Palm Cove. It's got a lot going for it, on top of the beaches.

Virginia: If someone were moving from another state for the lifestyle, would they live here full-time or split their time?

Jenna: A bit of both. Some clients spend about six months a year up here in their waterfront homes or Palm Cove apartments, enjoying our spectacular winter, then head south for the southern summer — the best of both worlds. But it's also a great area for families to live permanently, with good schools around Redlynch, Trinity Beach and Trinity Park.

Virginia: How do the prices compare to other areas?

Jenna: The value is really good. Someone coming from an equivalent area in Sydney or Melbourne would be paying far more. Waterfront here in the canal estate runs from about $1.7 million up to around $5 million — whereas in Sydney or Melbourne $1.7 million might get you an apartment with a glimpse of the water. So buyers get real bang for their buck.

Virginia: And from an investor's point of view, why buy here?

Jenna: Values were pretty stagnant for a long time, but 2020 and Covid really changed things — people recognised the value of regional markets, and one of Australia's paradises benefited. Before that, prices here hadn't really moved in 30 years; since then they've doubled. The GFC hurt the regions harder, but the strength has come back.

Virginia: What do you think is driving prices going forward — some people mention the Olympics?

Jenna: Limited housing availability is the big one. We're surrounded by hills, so there's only so much of Cairns that can be built on — you can't build into the hills anymore because of the regulations. That scarcity is what drives the future potential.

Virginia: How do you determine the value of a property in Blue Water — what's the difference between a $1.7 million and a $5 million home?

Jenna: It starts like any property — bedrooms, bathrooms, living spaces, land size. But on the canal you're also looking at metres of waterfront, from about 12 metres at the smallest up to 40 metres at the broadest, and the pontoon, which ranges from about 7 metres to 14 metres and beyond. That regulates the size of boat you can put out front. End-of-key properties — the streets are called keys — tend to be worth more because they have broader waterfront and can take a bigger boat. So the boat size you can berth often determines who'll buy the home, and the value.

Virginia: That explains why two similar-looking four-bedroom homes can differ by a million dollars.

Jenna: Exactly — it often comes down to the boat you can put out front. People sometimes find a home they love that just won't work for their boat, and that's the deciding factor.

Virginia: And this is a safe harbour, isn't it?

Jenna: Yes. The canal is built to a category-five cyclone rating — higher than the homes themselves. In practice that means you can keep your boat in front of your house during a cyclone, whereas if it were in the Cairns or Port Douglas marina you'd have to move it and anchor somewhere safe. It's a real safe haven.

Virginia: What challenges do buyers and sellers here face?

Jenna: Mainly finding the home that's right for you and also suits the boat you have or want. Some properties have shared pontoons with an easement at the base of the jetty, so it's important to know whether you've got exclusive or shared use. There are also rules about where the boat sits — some can go on the side of the pontoon, some only at the front, depending on the key lines and the waterline relative to your neighbour. It's the kind of detail you want a specialist to walk you through.

Virginia: Where do you see the market in the next five to ten years?

Jenna: It's a crystal-ball question, but we're invested here ourselves because we believe in it. There are only about 150 properties on the water side and roughly 80 on the dry side — the other side of the road — which now sell from about a million up. Right now there might be two or three waterfront properties for sale and one or two coming off-market. That scarcity is what we think keeps values rising. And as far as I understand, new canal developments aren't being approved anymore — the EPA and the state and local governments are very strict about tapping into natural waterways; they knocked back a large developer's proposal. That keeps supply tight.

Virginia: What advice would you give a buyer looking here for the first time?

Jenna: If you have any interest at all — even thinking you might retire up here one day — I'd get into the market now, because it's so restricted and we think prices will keep ticking up. It's still much cheaper than Sydney, Brisbane or the Gold Coast, and you've got the safety of a category-five safe harbour.

Virginia: And that's genuine advice, not pressure — when I was looking here, you were one of the only agents who even called me back. We've come through cyclones too.

Jenna: We have — Cyclone Yasi in 2011, and Cyclone Jasper last year, which was mainly a flooding event. In here the damage was very minimal; most of the revetment wall sits high enough that there was very little inundation, just a few homes built down at basement level. It felt well tested — a one-in-a-hundred-year event we hope never to see again. Cairns itself sits in a dip, and it's the low-lying older beach suburbs, built before today's council requirements, that struggled with erosion and flooding.

Virginia: That's fantastic — thanks so much, Jenna.

Jenna: You're welcome.