How Cairns rental prices compare with rest of nation as flood disaster adds pressure

The housing crisis in Cairns has intensified as rent prices skyrocket and affordable properties become increasingly scarce. Search our interactive table.

Devastated homeowners with flood-damaged properties are putting pressure on an already tight rental market as they pay $900 or more a week for a roof over their heads.

Queensland Reconstruction Authority data shows there are 262 households in emergency housing such as motels – there may be countless others who have found a bed with friends or family.

Median rent in Cairns has increased by a whopping 31.3 per cent since March 2020, according to CoreLogic.

Ray White Cairns director and rental manager Sharyon Murphy said she had just leased a home to a flood victim for $900, and demand would escalate.

Fiona Rose and her partner Aaron Mikkelsen had their Holloways Beach rental property flooded, and are now looking for a new property to rent for themselves and two of their children. They have looked at more than 30 rental properties in the past five weeksPicture: Brendan Radke

Competition for Cairns properties for rent for $500 or less per week was fierce, Ms Murphy said.

“We don’t have a rental crisis, we have a rental affordability crisis,” she said.

“We have properties to rent, but not everyone can afford them.”

The median price of a home rental in Cairns is $623 – 5.8 per cent up – compared with a national figure of $601.

The unit median in Cairns is $441.

While there’s a rent squeeze nationwide since the Covid pandemic, Ms Murphy said the rental vacancy rate in Cairns before Covid struck in early 2020 was two per cent – tighter than the capital cities.

The Cairns rental vacancy rate is 1.6 per cent and the number of properties has almost halved from a decade average of 3.9 per cent.

CoreLogic’s research head Eliza Owens said rent increased 9.6 per cent in 2021, 8.9 per cent in 2022, and 6.4 per cent in 2023 in Cairns.

“Growth in rent values also seems strongest in the unit segment at the moment, which may be the relatively affordable option,” Ms Owens said.

But there is hope for stressed renters with a slowdown anticipated this year, with more people opting for share housing and downsizing to more affordable rentals, along with a potential pick-up in investor activity.

Ray White Cairns property investment managers Kylie Cooper and Sharyon Murphy have seen a huge squeeze on a tight rental market in the past five weeks. Picture: Brendan Radke

PropTrack economist Cameron Kusher pointed out that with interest rates going up 13 times in 15 months, investors were getting out and new builds were dominated by owner-occupiers rather than build-to-rent.

High build costs, and a labour shortage have further dissuaded investors.

Cairns is the third most expensive Queensland local government area for house rentals, behind the Gold Coast and Douglas Shire.

This three bedroom home at 29 Duignan St, Whitfield, is for rent for $750 per week. Picture: Supplied

Nationally, median rent is $601 – up from $437 in August 2020.

Ms Murphy said January was the busiest time with professionals such as doctors and teachers arriving in town.

“There are teachers in motels waiting to get a property,” she said.

The demand for units under $400 was especially strong, from pensioner couples and single mums.

“We have a flood victim prepared to rent a $900 property and pay six months’ rent, sight unseen, but we prefer for people to see the property, often on Facetime,” Ms Murphy said.

“People displaced by the floods are often homeowners becoming renters.

This four bedroom home at 27 Savannah St, Palm Cove, is for rent for $950 per week.

“It is very hard to get a house for $500 a week – most are $650 to $900 and up to $1400 per week, the majority in the $650 to $750 range,” Ms Murphy said.

She said tenants renewing lease agreements were routinely accepting increases of $50 or more per week.

“There’s a lot more restraints on landlords, they can only increase the rent once every 12 months, it is hard to get a tenant out unless you are selling, renovating or moving in, and rate increases are not in line with rents – owners are financially stressed,” Ms Murphy said.

“The big issue is going to be insurance premiums, after Cyclone Yasi (in 2011) premiums went up 300 per cent for units, there’s no competition, there’s only one insurer, and body corporate levies will go up due to insurance – one went from under $4000 to more than $9000, that’s a bit scary,” she said.

This four bedroom home is for rent for $750 per week, at 20 Port Close, Trinity Beach. Picture: Supplied

“I think we need to give investors more of a reason to keep in the market, some tax breaks, and the reinsurance pool could help alleviate things.”

Mr Kusher said social housing stock had dwindled greatly over the last 30 to 40 years.

“So if individuals are not providing rental stock, who is going to provide it?” he asked.

“The rental market is the tightest ever seen, there are double digit rent increases, making it harder for people to pay rent and save for a home deposit,” Mr Kusher said.

“We desperately need more housing.”

Originally published as How Cairns rental prices compare with rest of nation as flood disaster adds pressure