Cairns Economic Monitor - May
This month’s headlines have been dominated by the escalating US tariff war — a self-inflicted blow with global consequences. What began as a trade skirmish is now casting a long shadow over the world economy, with Australia not immune to the fallout. Markets are already anticipating swift action from the Reserve Bank of Australia, with a rate cut widely expected to counteract potential shocks to economic growth.
Closer to home, there’s some encouraging movement in Cairns’ building approval numbers. As we noted last month, the trend is improving — great news for a region starved of adequate housing. However, while the uptick is welcome, approval volumes are still well below the levels needed to make a meaningful dent in our accommodation shortage. There's still a long road ahead.
The RBA’s next official rate decision is due on May 20, and markets have already priced in a 25 basis point cut — bringing the cash rate down to 3.85%. Looking further ahead, the outlook is for a series of additional cuts, potentially pushing rates as low as 3.10% by year-end.
On the jobs front, the national labour market is beginning to soften, but Cairns continues to hold its ground. The region’s Trend unemployment rate has fallen to just 4.0%, with local employment growth outpacing both state and national averages. It’s a positive sign of the resilience and strength in our local economy.
Meanwhile, many property owners recently received a surprise email from the Valuer-General announcing a 20–40% jump in land valuations. While rising property values might feel like a win, they come with a sting — particularly for those paying land tax and council rates, which are tied directly to land value. With council’s 2025–26 budget on the horizon, all eyes will be on whether these higher valuations translate into a bigger-than-usual revenue boost. If they do, let’s hope that extra income is reinvested wisely back into our community.