What does 2018 have in store for Cairns?


If Cairns was a stock, I’d be buying it right now. Whilst 2017 has had some ups and downs for business, I expect 2018 to be a strong year overall for the Cairns economy due to the following five key drivers:


1)   Tourism to continue to grow

Whilst recording a strong 2017, there is no doubt the tourism sector did not deliver the level of growth many were predicting. There are a few reasons for this, namely, aircraft passenger restrictions (caused by cancelled Chinese flights and domestic supply factors) and a reduction in accommodation supply with Rydges Tradewinds being taken out of the market for redevelopment. I see this turning around in 2018 with strong growth returning driven by:

  • Continued inbound international tourism growth forecast for Australia.
  • An increase in aircraft passenger capacity for Cairns due to the arrival of China Southern Airlines.
  • New accommodation supply coming online through the GA Group and the Crystalbrook Collection.
  • Continued investment in the sector from new entrants and current businesses looking to expand capacity. 


2)  2)   Government infrastructure spending

In 2018, Cairns is set to start turning dirt on some major Federal and State infrastructure projects including:

  • The Cairns Convention Centre Upgrade
  • Smithfield Bypass
  • Additional works on the Bruce Highway south of Cairns
  • Dredging of Trinity Inlet
  • The start of new infrastructure investment for the Cairns Marine Precinct

Each of these projects will provide a short term hit during construction with workers coming into the region and local business benefiting.  This will improve regional capacity and efficiencies providing longer term benefits for the region. 


3)   Smashed Avos and Mango Smoothies

Recent years have seen a huge increase in demand for avocados and tropical fruits. Whilst there is a significant amount of supply still to hit the market the Tablelands are well placed geographically and seasonally to continue to benefit from an increasing demand for this produce. With the arrival of wide-bodied aircraft from China (China Southern Airlines) we may be about to unlock the logistics to export from Cairns into China, opening up new possibilities for agriculture in North Queensland. 


4)   Low interest rates and a lower dollar

Whilst there is some talk of rate rises in 2018, interest rates look set to continue to stay low by historical standards. Similarly, the Australian Dollar is predicted to continue in its recent trading range of 75-80 cents vs the US Dollar. This means we will continue to see an environment conducive to investment in the Cairns region. 


5)  5)   Real Estate to lead a strengthening local economy

Before anyone gets excited, I’m not predicting a boom in Cairns Real Estate. However, I do believe continued positive economic growth leading to more employment will create an environment that will support growth in residential real estate. This in turn should see an increase in consumer confidence, therefore, benefiting the retail and hospitality sectors. I’m certainly not on my own in these predictions with Simon Pressley from Propertyology recently telling Sky News that Cairns is his real estate investment hot spot for Australia in 2018! In making his predictions, Simon sighted the positive economic drivers above along with Cairns' great lifestyle, affordable real estate and local infrastructure, including Australia’s 5th biggest airport, 2 Universities, great local schools and hospitals. Let’s hope he’s right!

I’m excited about 2018 and believe it will be a good year for Cairns. I hope all of our businesses can benefit.