The Pros and Cons of Investing in Cairns’ Apartments vs. Houses

Cairns continues to attract property investors who are looking for strong rental yields and long-term capital growth. 

But when it comes to investing here, should you choose an apartment or a house? Each property type comes with its own set of advantages and challenges. Understanding rental yields, tenant preferences, and long-term growth potential will help you make an informed investment decision.

Rental Yields: Which Offers Better Returns?

Rental yield, which is the annual return on investment compared to the property’s value, is a key factor for investors. Generally, apartments in Cairns tend to offer higher rental yields than houses. Their lower purchase prices compared to rental income make them attractive for investors looking for strong cash flow.

According to a data from SQM Research, Cairns’ rental market remains tight, with consistently low vacancy rates. This suggests a strong demand for rental properties, benefiting both house and apartment investors. However, apartments in key suburbs like Edge Hill and Cairns North typically generate rental yields of 5-6%, whereas houses often range between 3.5-5%, based on the data from realestate.com.au.

Tenant Preferences: Who is Renting What?

The type of tenants you want to attract will influence your investment choice. Apartments in Cairns often appeal to young professionals, students, and short-term renters who prioritise convenience and affordability. These tenants are drawn to locations near the city centre, employment hubs, and public transport.

Houses, on the other hand, are favoured by families and long-term renters looking for more space, private outdoor areas, and access to schools and parks. Properties in family-friendly suburbs like Redlynch, Smithfield, and Bentley Park tend to attract stable tenants who sign longer leases, reducing turnover and vacancy risks.



Long-Term Growth: Houses vs. Apartments

While apartments may offer higher rental yields, houses generally provide better capital growth over the long term. This is largely because land appreciates in value, whereas apartments are subject to body corporate fees and shared ownership of land.

Historically, houses in Cairns have shown stronger price growth than apartments, particularly in sought-after suburbs where land is limited. For investors focused on long-term appreciation, a house may be the better choice.

Ongoing Costs and Maintenance Considerations

Houses require more maintenance and repairs compared to apartments. Owners are responsible for the maintenance of the entire property, including gardens, fencing, and structural maintenance. However, houses do not have body corporate fees, which can be a significant ongoing cost for apartment owners.

Apartments come with lower individual maintenance responsibilities, as body corporate fees cover common areas, exterior maintenance, and shared facilities like pools or gyms. While this reduces direct expenses for the owner, these fees can cut into rental yields.

Vacancy Rates and Market Demand

A key consideration for investors is the vacancy rate, or the percentage of rental properties sitting empty at any given time. According to SQM Research, Cairns has maintained low vacancy rates, meaning demand for rental properties is strong. This benefits both apartment and house investors, ensuring steady rental income and lower risks of prolonged vacancies.

Which Investment is Right for You?

Choosing between apartments and houses in Cairns depends on your investment goals:

• If you want higher rental yields and lower entry costs, an apartment may be the best choice.
• If you prioritise capital growth and long-term stability, investing in a house could provide better returns.
• If you prefer low-maintenance ownership, apartments offer a more hands-off investment option.
• If you value land appreciation and family-focused tenants, houses provide long-term benefits.
  
  

Start Your Cairns Property Investment Today

Whether you’re looking for a high-yield apartment in the city or a family-friendly house in the suburbs, making the right choice comes down to strategy.

At Cairns Property Collective, we provide expert knowledge of the local market to help investors maximise returns and minimise risks. If you’re ready to take the next step in investing in Cairns, our team is here to guide you through the process.

Contact us today for personalised property advice and expert management services.