Far North economic update ahead of 2025 election shows region outperformed nation

The Far North recorded the highest growth in property prices across the nation, but the social cost sets the scene for debate on key policies and their local impacts ahead of the election.

Tourists walk along the pedestrian friendly Esplanade Dining Precinct near the Crystalbrook Flynn hotel. The Cairns region’s GDP growth is higher than the state and national average. Picture: Brendan Radke

The Far North recorded the highest growth in property prices across the nation over the past three years, but the economic win has come at a social cost, setting the scene for debate on key policies and their local impacts ahead of the election, economists say.

Brisbane-based economist Gene Tunny and Conus Business Consultancy Services’ Pete Faulkner presented at the Advance Cairns pre-election economic analysis event on Thursday. They shared insights about which economic policies would likely shape the 2025 election debates, to how the growth of the Cairns region Gross Domestic Product outperformed the state and nation.

Mr Faulkner said housing was “by far the biggest issue” the region was facing, but property owners and investors had a lot to celebrate.

Conus Business Consultancy Services partner Pete Faulkner, Brisbane based economist Gene Tunny and Advance Cairns chief executive Jacinta Reddan discuss the Far North's economic markers ahead of the 2025 federal election. Picture: Arun Singh Mann

He said after about a decade of stagnant property prices, the median price in Cairns increased from about $375,000 pre-Covid to about $675,000 now, or, about 18 per cent per annum over the past three years.

“Over the past three years Cairns is one of, if not, the best performing region in all of Australia and better than all of the capital cities,” he said.

“That’s 60 per cent in three years, compared to the nation’s average of about 21 per cent over those three years. Great if you own property, not so great if you’re trying to get property.”

And with a rental vacancy rate of less than one per cent for almost four years, Mr Faulkner said rents had increased by about 12-14 per cent per year, over the last three years.

Mr Faulkner’s data showed GDP in the Cairns region between 2019-20 and 2022-23 had grown about 15 per cent, while in the same time frame Queensland had grown 11.5 per cent and Australia was up 10.5 per cent.

Unemployment in Cairns is lower now, than it was prior to Covid, contributing towards the region’s growing GDP, but also putting pressure on the city’s housing supply. Tourists enjoy the Esplanade Dining Precinct. Picture: Brendan Radke

He said prior to Covid unemployment was about six per cent, but now sat at 4.2 per cent, and his analysis also found regional areas were more volatile to inflation, meaning when it fell, “it fell faster,” while the same principle applied to increases.

But all those markers of growth could be undermined by supply of housing, Mr Faulkner warned, noting while building approvals across Queensland in the last year had increased by 20 per cent, they had decreased by 14 per cent in Cairns.

Mr Tunny from an economic perspective he expected populist policies to be debated during the upcoming campaign, aimed addressing the decline of disposable income, such as beer tax freezes and tax deductions for dining and entertainment expenses.

“These policies will be popular for places like Cairns with hospitality, but they’re not good policy, they will be rorted,” he said.

Mr Tunny said voters would likely be looking for effective immigration policies to counter housing pressures, but Advance Cairns chief executive Jacinta Reddan said major changes to foreign population intakes had the potential to threaten the Far North’s skilled workforce.

Originally published as Far North economic update ahead of 2025 election shows region outperformed nation