Women In The Black

My friend has two investment properties in Cairns, which he purchased for approx $200k. The two properties are positively geared. My friend is suggesting that I look into buying in Cairns as it only requires about $10-$15k to invest in a property.What are your thoughts in this area? I wonder what sort of capital growth can we expect in northern QLD?Thanks for your time.

February 12, 2013   Asked by Kate, Professional, Sydney, NSW
Answer:

Hi Kate, I would definitely not consider investing in Cairns. As you imply, the rental return is around 7% gross which is strong. However, the capital growth is dreadful. The median 5 year growth figures for units in Cairns City and Cairns North are around -25% and – 24%. The 10 year average annual growth is only 2%. If you are looking for good capital growth, I would not buy here. (Data sourced from Smart property investment, February 2013).

The other important thing to consider when you buy an investment property is that you spend enough time researching the local market and the property itself. Once you have bought the property, you need to think about how it is going to be managed. If you are buying interstate, this will make things a lot more difficult and challenging.

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This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.

Expert Profile

Nick Viner
Nick Viner   Property Expert

Leading Sydney Buyers Agent specialising in residential properties including investment properties.

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