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brisbane flood

Navigating the Brisbane real estate market post-flood

What a few weeks it’s been in Queensland – the once in a 100-year rain bomb has come and gone (and now tormenting NSW), leaving us to pick up the pieces.

The big question everyone is asking is will it have much of an impact on house prices and will it adversely affect demand for property.

From our perspective, no – we do not foresee it having a significant impact on the market. Yes, properties that experienced flooding and were damaged may be impacted, especially factoring insurance premiums will rise, but the bulk of the market not impacted directly by the floods will not.

A critical factor in our perspective is that an event such as the Brisbane floods reduces available housing stock, with homes that were listed (and impacted by the weather event) being taken off the market for repairs. This in turn drives up demand for properties not impacted, so the cycle continues.

Another consideration to take is that most homeowners who were or are considering listing may find out they are woefully underinsured, with some industry experts stating that more than 80% of homeowners may be at risk. This will lead them to de-listing their homes, potentially until repairs are undertaken, and maybe not re-listing.

There will be a lot more hesitation to purchase in flood-prone areas, which will drive more demand for properties that were not impacted by the event. This could pave the way for savvy home buyers to take advantage of lower prices in flood-affected postcodes (after undertaking your due diligence).

In some suburbs, where supply is limited, and liveability is higher (i.e. Windsor, Chelmer in Brisbane), flooding events usually impact pricing less than lower demand postcodes. However, if you are a buyer, there may be some bargains.

If you are looking to purchase in flood-affected areas, it is essential to do your due diligence, and you must be mindful that bank valuations will take the risk of flooding into account when assessing value. If you are looking at a home that has been inundated in both major flooding events (2011 and 2022), the chances are the valuation may be substantially less than you thought – which is a risk when putting an offer in.

Yes, the real estate market is firing right now, and the fear of missing out may drive you to make some riskier decisions; however, always take the time to check out Brisbane’s flood map and even ask some neighbours in the suburb you’re looking to buy in how much of an impact the flood had.

So, the long and the short of it:

  • The greater market will not be impacted at all – if anything, less supply may cause demand and pricing to increase in areas not impacted by flooding

  • Less desirable suburbs where flooding occurred will be far more impacted price-wise than highly desirable suburbs – however, keep your eyes open for a bargain

  •  Do your research before making offers on homes in flood-prone areas

  • Look into insurance costs of flood-impacted properties

So, there you have it – a short article summarizing our thoughts on the market!

Please keep your eyes peeled for our next article focusing on interest rates.

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