Cairns rental gap

RTA rental data for the September quarter were generally consistent with the previous quarter. There may be some early signs that declines in Townsville and more so Mackay are stabilising. Mackay could be the earlier indicator to watch here after the extraordinary gains in coking coal (steel) prices over the last year.

However the Cairns premium gap remains in the largest sectors:

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To graph that premium/discount directly for Cairns and Townsville in the mutually largest 3 bedroom sector:

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Most of that gap in recent quarters has been the decline in Townsville. The median rent for a 3 bedroom house in Cairns has been flat since 2014. However in aggregate it amounts to a substantial sum diverted from alternative spending.

There are very significant differences between housing stock in Cairns and Townsville. The 1 bedroom unit sector is interesting. This has shown the highest rental growth of any sector over the last two years in Cairns. It is also a sector in Cairns which can be fluid between residential and tourism. The much smaller Townsville 1 bedroom rental sector is now at an equivalent median rental as Cairns. The only sector this happens and only a small discount to the Townsville 2br rental. I suspect this relates to more recent stock but a sector to watch.

Most recent building approvals commentary at Conus: Regional Building Approvals disappoint in Cairns but better in Townsville

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Smooth flight path for Airport

While growth remains healthy the monthly passenger numbers for Cairns Airport have become almost boring in their recent consistency.

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In September Domestic was  +4.9%; international +9.1%. International growth rate has come back somewhat in recent months but that is to be expected given it is no longer coming off the previous very weak period.

Good numbers also continue to be reported this week by Sydney Airport: domestic +3.9%;  international +8.6%. All charts and BITRE info will be updated imminently have been updated for most recent data at the Cairns Airport page.

Queensland labour force sample

The most recent labour force numbers for September from the ABS were out yesterday. There is plenty of commentary and the usual political use and abuse of different statistics. There is also an interesting note from ABS at Insights from the original data.

The incoming rotation group in Queensland in September 2016 was noticeably different in its labour force characteristics to the group that it replaced, and to the rest of the Queensland sample rotation groups, with a greater level of influence on the current month’s estimate and movement estimate than usual.

Through the Composite Estimation process the ABS has temporarily reduced the influence of this rotation group for September estimates and this is reflected in original, seasonally adjusted and trend estimates. This means that the remaining 7/8 of the Queensland sample will have a higher influence and contribution to the September estimates, with a marginal increase in standard errors for the estimates for this month.

The ABS will review this when October data for this rotation group are available. In the meantime, the ABS encourages users of the GM1 data cube to exercise caution in interpreting incoming and outgoing rotation group changes for Queensland, and, to a lesser extent, Australia.

There has been critical comment on the jobs data from a number of economists, including what this may mean for the Queensland data: Economists have taken aim at the reliability of Australia’s jobs data. May be interesting to see if and how that plays out across the regions next week also.