Commercial & Residential in Cairns: Where the Smart Money Is Going in 2026
Guest: David Murphy – Director, Ray White Cairns & Northern Beaches
Cairns has been on a serious run over the past few years. Tight rental markets, rising construction costs, limited land supply and a wave of southern interest have pushed both house and unit prices to new territory.
But what does that actually look like on the ground for buyers, investors and business owners in 2026?
In a recent episode of the Cairns Property Podcast, I sat down with David Murphy, Director of Ray White Cairns & Northern Beaches, to unpack exactly that, from industrial sheds and CBD offices to “affordable” housing and why certain suburbs are now priced in ways that make zero sense on paper.
David’s background in property valuation and property economics, combined with his frontline role running a large residential and commercial sales team, gives him a rare dual perspective: data plus day-to-day market reality.
From Property Economics to the Coalface of Cairns Real Estate
David didn’t start in sales. He studied a Bachelor of Property Economics, then worked as a property valuer with Herron Todd White before jumping across to the sales side in 2014.
That valuation background still shapes how he views the Cairns market today:
He looks beyond the headlines and median prices
He pays close attention to migration, business confidence, construction costs and population growth
He’s constantly thinking about what the market will look like 12–24 months from now, not just today
That ability to look under the hood is crucial in a market like Cairns, where micro-markets, zoning, flood risk and replacement cost all play a huge role in long-term performance.
If you’ve read any of our recent blogs — like Is Buying in Cairns a Good Investment? or our 2026 Cairns property forecasts you’ll know we share a similar philosophy: ignore the noise, follow the fundamentals.
Why Industrial Is the Standout Commercial Play in Cairns
When we shifted the conversation to commercial, David was crystal clear:
The industrial sector has outperformed office and retail and it’s where he’d be focusing for “safe as houses” style commercial investing.
A few key points from the discussion:
Small industrial sheds (80–150 sqm) have seen huge price growth over the last couple of years.
Stock is extremely tight; owner-occupiers and small businesses are competing hard for anything decent.
David’s team has seen prices jump from the mid-$300k’s to the high-$400k’s / low-$500k’s in some strata complexes in under a year.
For many purchasers, it’s less about yield and more about control and security — buying through SMSFs and owner-occupied structures.
On the leasing side, vacancies in that ~100 sqm warehouse range are “as rare as hen’s teeth.” There’s almost nothing available, which is pushing both rents and capital values up aggressively.
From a feasibility angle, new industrial development is still tough. Construction costs around $2,000 per sqm for concrete tilt-slab sheds mean you’d need to sell a 100 sqm unit for $600k+ to make the numbers work — yet you can still buy established stock below that level. Until that gap closes, new supply will remain limited, reinforcing the existing scarcity.
For investors who value stability, this lines up with what we’ve been seeing across the market: industrial in well-located pockets is one of the most resilient parts of the Cairns commercial sector.
Retail and CBD Offices: Early Signs of a Comeback
Retail in the Cairns CBD took a big hit when international tourism slowed and Japanese buyers exited the market. Rents fell, vacancies rose and sentiment was weak.
David’s take now:
Vacancies are finally reducing, with long-empty shops leasing up
Confidence is returning, but body corporate fees are still a big drag in some complexes
In many retail strata buildings, high ongoing outgoings are the main reason investors hesitate
Office space is also starting to look interesting, particularly small offices in the CBD with good parking and the potential for value-add fit-outs. For the right buyer who’s prepared to update and hold, David sees scope for solid returns as demand continues to rebuild.
Yields across the main commercial sectors currently sit around:
Office: ~7–8%
Industrial: historically ~6.5%, but some recent sales have compressed into the low 5s
Retail: highly variable depending on tenant, location and body corporate impact
For pure investors, the key is balancing yield vs risk vs vacancy. Higher returns are often available in locations or asset types that sit vacant for longer — so having a good tenant “in your back pocket” can transform a marginal deal into a strong one.
2026 Outlook: Why the “Affordable” End Should Lead the Next Leg
Across both residential and commercial, David and I share a similar view of the next 12–24 months:
We don’t see anything within the property fundamentals (migration, construction costs, rental pressure, land supply) that points to meaningful price falls.
Construction costs remain astronomically high, throttling new supply of both apartments and commercial stock.
Cairns remains landlocked by mountains, cane farms and the ocean, making well-located infill and fringe sites incredibly valuable.
The segment we both expect to outperform?
The affordable price bracket.
On the residential side, that means:
Houses between roughly $550k and $700k in good, established suburbs
Entry-level apartments in the $400k–$500k range, particularly when they’re significantly below replacement cost.
On the commercial side, it’s:
Sub-$1M industrial assets in city-fringe or northern corridor locations
Smaller office suites with parking in the CBD that can be repositioned with some capital works
Layer on top of that the current LMI / low-deposit schemes which are funnelling buyer demand into that same bracket, and you have a pressure cooker of competition for anything remotely decent.
Replacement Cost & the “Floor” Under Cairns Apartment Prices
We spent time on a topic that comes up a lot in our blogs and buyer strategy sessions: replacement cost.
Developers we speak to regularly tell us that for mid-rise or high-rise stock (3+ levels), you’re realistically looking at:
End values around $1M for a quality 2 bed, 2 bath, ~100 sqm apartment
Even at that level, margins are often thin once you factor in land, construction, finance and risk
Yet in today’s market, you can still buy modern, well-located apartments in Cairns in the $400k–$500k range.
As David put it, until prices rise to a point where new supply actually becomes profitable, very little will be built which effectively creates a price floor under existing stock.
For investors, that’s one of the key reasons we continue to like low- to mid-range apartments and townhouses near the CBD:
They’re well below replacement cost
They benefit from tight rental markets
They’re in land-constrained, amenity-rich locations
Landlocked City, Poor Zoning & Why Certain Pockets Will Keep Running
Another big theme from the conversation was Cairns’ geography and town planning:
Mountains to the west, ocean to the east, cane farms to the south
Limited industrial and commercial zoning in the right places
Very little remaining developable land along the northern corridor
David called out suburbs and pockets such as:
Portsmith, Bungalow and city-fringe pockets for commercial/industrial
Smithfield, Trinity Park and the northern industrial corridor, where suitable land and zoning are extremely scarce
When an area is both zoned appropriately and land constrained, prices have only one real direction over the long run, especially when you add rising replacement costs and population growth into the mix.
This aligns with what we’ve written previously about Cairns vs Townsville and why Cairns’ constrained land and higher barriers to new supply can make it the superior long-term growth market.
When the Numbers Don’t Make Sense: Suburb Price Mismatches
We also dug into one of my favourite topics: suburb mismatches where two locations with very different fundamentals are trading at similar prices.
A couple of examples:
Edmonton vs Trinity Beach
Manoora vs Cairns North
In theory, proximity to the beach, CBD, hospitals, airport and established amenities should give Trinity Beach and Cairns North a clear long-term edge. Yet when you look at recent sales, very similar properties in Edmonton or Manoora are sometimes selling for comparable money.
Why?
Heavy interstate investor activity in the southern corridor, driven largely by yield and cheap headline prices
Lack of nuance around micro-markets and local knowledge
Buyers following generic “data-only” suburb lists rather than on-the-ground analysis
For savvy buyers who understand Cairns deeply, these mismatches can create opportunities:
If you can buy the same 4 bed, 2 bath home in Trinity Beach for a similar price to Edmonton, where do you want to be in 10 years?
Auctions in Cairns: Why They’re More Buyer-Friendly Than You Think
Ray White Cairns & Northern Beaches now takes more and more properties to auction, and for good reason.
From a buyer’s perspective, David actually sees auctions as:
More transparent than private treaty
A way to see the competition in real-time
A safeguard against relying solely on an agent’s interpretation of “interest”
Importantly, he also noted that:
He’s never had an auction sale fail to value up in his entire career as a valuer or agent
Valuers tend to be more comfortable with auction results, because they can see the bidding history and number of participants
The final price is usually only $500–$5,000 above the underbidder, not $50k+
For sellers, auctions:
Create competition and emotion in a controlled environment
Force buyers to be ready — finance, due diligence and decision-making all done upfront
Deliver cash unconditional contracts on the day, with far less risk of finance fall-overs
There’s also more flexibility than most people realise. Lower deposits, longer settlements and LMI / 5% scheme buyers can all be accommodated as long as the conversation happens with the agent before auction day.
David’s Playbook: What He’d Buy in Cairns Right Now
If David were going into the market himself over the next 12 months, here’s what he’d be targeting:
For commercial:
Industrial sheds in city-fringe or northern corridor locations
As close to “safe as houses” as possible, strong underlying land value, broad tenant appeal
Ideally with parking, good access and some scope for rental uplift over time
For residential:
Entry-level houses in the $550k–$700k range, where competition is fierce but long-term demand is strong
Apartments and townhouses in Cairns North, central suburbs and select northern beaches, particularly where they’re well below replacement cost
And just as importantly, he’d be very careful about paying northern-beaches prices for southern-corridor fundamentals, or buying in pockets where body corporates or flood risk can quietly erode returns.
The Advice He’d Give His 18-Year-Old Self
We wrapped up the episode with a question I like to ask all guests:
“What advice would you give 18-year-old you?”
David’s answer:
Back your own decision-making sooner.
Don’t assume that if no one else has moved on a deal yet, you’re missing something. Trust your analysis and be willing to be early.Run towards mentorship.
Find people who’ve already done what you want to do — in business, property and life. The right mentors can save you years of trial and error.
It’s a philosophy that resonates strongly with how we work at The Buyers Co: pair data and strategy with real-world experience and guidance.
Thinking About Buying in Cairns?
If you’re considering buying a home, investment property or commercial asset in Cairns, this episode is a must-listen. It combines macro fundamentals with street-level insight across:
Industrial, office and retail
Affordable housing and apartments
Suburb mismatches and micro-markets
Auctions, valuations and negotiation strategy
And if you’d like help turning these insights into an actual purchase, that’s exactly what we do.
At The Buyers Co, our Cairns buyers agent service helps you:
Identify the right suburbs and asset types for your goals
Avoid overpaying or buying in the wrong pocket
Navigate auctions, multiple-offer situations and off-market deals
Buy with confidence and clarity, from search to settlement
Ready to buy smarter in Cairns?
Book a free strategy call with our team and let’s map out your next move.
