Is the Port Douglas property boom now turning into a gentle murmur?

Only a few weeks ago I was contacted by a prospective buyer to advise me that their original ‘approved’ amount of $800,000 was now $500,000.

With no end in sight for mortgage hikes many homeowners are deciding to sit tight or can’t afford to move. Those that do still want to move are finding that their dollar won’t stretch as far and are looking at casting their net in a wider area.

With nearby Mossman’s median price for houses being $370,000 (realestate.com) many more families and owner occupiers are buying more accessible housing in the locality where housing is more affordable.

In Port Douglas the median price of houses (4 bed) in the past 12 months has increased by 19.1% with apartments (2 bed) up by 30.8% (Domain).

Even with a downturn and vendors having to accept lower offers or discount their price, property prices would be hard pressed to return to their pre June 2021 level after an almost 15 year flat line.

The unique Port Douglas property market is still buoyant. Despite national home values declining over January with Sydney being hit the hardest, down 13.8% and days on market almost doubling, Port Douglas is a more durable market due to its unique nature.

92% of enquiries for properties here are from other states. These comprise mainly of investors (with some seachangers) who realise that Port Douglas still boasts some of the best value property in Australia (and in Paradise!).

Tie this in with long term rental incomes that are now on par with our southern stated neighbours (but with property prices around 30% less) and investment in properties here seems very attractive.

Holiday accommodation investment offers approximately 5% net return (and a ‘free’ place to stay whilst escaping southern Australian winters) and a chance for capital growth too.

These investors want their ‘nest egg’ to work and are not affected by mortgage interest rate hikes with many being cash buyers.

There are high end investors looking for a ‘second home’ or investment with budgets over $1m+, but the majority are interested in the lower end units and holiday apartments.

Cairns listed properties are down 7% from January 22-23 and market stock is also slower in Port Douglas, especially in the under $400,000 which is in most demand.

The economic adage of supply and demand is the basis of any property market. Higher end properties and family homes are slowing as the demand cools and vendors are now reducing asking prices to meet the market.

Vendors who listed high during 2022 and still find their property on the market in 2023, might have to consider that the boat of opportunity has sailed.

With inflation having peaked (from 8.4% December 2022 to 7.4% January 2023) and some of the major drivers of high prices being resolved (crude oil and shipping costs), will this slow or stop further interest rate hikes?

Unit demand is still there but engagements per listing in Port Douglas has dropped by -8% in the last week (Domain). The local landscape is still hard to predict. Whether this is the slowing down of the market and demand or just a seasonal low, or an economic plateau, time will tell.

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Rosie Wang is a Sales Agent for Property Shop Port Douglas. For more information, call Rosie on 0425 345 771.