Qld house prices rebound after floods
Homeowners in flood-prone but desirable suburbs shouldn’t fret about having to sell their properties for a loss.
New research carried out in the wake of southeast Queensland’s devastating 2010/11 floods shows buyer fears about purchasing in some flood-hit suburbs are relatively short-lived.
The fear factor lasts for only about a year in desirable communities.
But the news is not so good for less popular suburbs.
A Queensland University of Technology study looked at 48 greater Brisbane suburbs affected by the flood disaster.
It found attractive suburbs, such as Bulimba and St Lucia, rebounded significantly quicker than when Sydney last flooded, or in the wake of the Victorian bushfires.
A soft property market before the disaster and limited housing stock helped buoy prices to almost pre-flood values 12 months after the floods.
The riverside suburbs of Fairfield and Graceville totally bucked the stigma. Just three months after the floods, the median house price had increased by $23,000.
A major factor was the fact that most properties in those two suburbs did not have water above the floorboards, meaning the flood recovery was faster and cheaper.
But homeowners in lower-value areas suffered the biggest drop in property prices.
Three months after the disaster, the median house price had decreased by 22.7 per cent in those communities, which included the likes of Oxley and Goodna.
A year on, they’re still yet to recover to the same level as homes in more well-to-do areas.
However, the depressed prices meant buyers – often investors – snapped up more homes than usual.
The study’s author, Professor Chris Eves, said many flood-affected home owners were unable to afford necessary repairs, and were forced to put their properties on the market.
Buyers saw an opportunity to grab a bargain and jumped.
“Selling at a reduced price was the only option,” he said.
“And for buyers, the lower price, even with adding on the repair bills, made good economic sense given the potential future rental returns.”
The study also showed rent prices spiked in flood-hit suburbs immediately after the disaster as residents tried to stay in their communities while their own homes were repaired.
Within six months rents, and demand, had returned to normal levels.