23 Mar 2022

Brisbane flooding doesn’t halt booming property market

A house located in a Brisbane flood-prone area has been sold for a whopping $1.8 million with 10 bidders competing for the property.

The four-bedroom, three-bathroom property in the riverside suburb of Graceville, in Brisbane’s west, sold for above the reserve price despite being on a street that was hard hit by the catastrophic 2011 floods in Brisbane.

It’s a situation real estate experts are seeing play out across the market.

Four out of five homes due for auction midweek had been sold in flood-affected suburbs, said Ray White auctioneer Gavin Croft.

It was a similar story for weekend auctions, with seven properties already snapped up out of the 10 he was due to call.

“Sherwood, Graceville, Oxley market are typically challenged when it comes to the floods,” he told REA.

“It was a real litmus test that we had properties that were central to these locations that have gone under.

“Four sold, all with strong competitive bidding with four to 10 registered bidders. The energy, the confidence in the market was interesting to see. That was a good litmus test given where those markets are and what has unfolded weatherwise.”

Place Estate Agents chief auctioneer Peter Burgin said they still had 35 auctions scheduled for the weekend but were encouraging people to bid via phone or an online system, to avoid moving around the still flood-affected roads unnecessarily.

Brisbane had 192 auctions scheduled for the weekend, according to CoreLogic data.

It is still unclear how the current disaster will impact property prices for the state.

CoreLogic found that following the devastating floods in 2011, which caused over $2 billion in damage and affected 200,000 people across the region, Brisbane’s property values dropped by 6.1 per cent for the year afterwards.

The impact stretched out for years and it was not until March 2014 that the market fully recovered to see house values back at December 2010 levels.

Eliza Owen, head of Australian research at CoreLogic, said despite a booming market, particularly in South East Queensland recently, the impact of extreme weather events and climate change was “sobering”.

“Although the 2011 floods saw inundated suburbs recording a larger downturn relative to the Brisbane average in the year following the flood, most suburbs saw a recovery in prices within three to five years with riverside precincts still attracting premium values over areas located further from the river prior to the latest flooding event,” she said.

“Australians have historically placed a high value on housing within close proximity to the water. Whether this trend changes based on forecasts of more frequent severe weather events is yet to be seen.”

One of the biggest differences between the market in 2011 and 2022 is the length of time between these devastating extreme weather events, she noted.

“In 2011, major flooding had not affected the region since 1974, and flooding of this nature was considered a once in a 100-year event,” she said.

“For current homeowners, it has been just over 11 years.”

She added the short time frame between significant flooding events could shift buyer attitudes around housing in low-lying areas.

It could mean markets with low flood risk attract greater demand over time and result in higher insurance premiums putting people off from purchasing in areas vulnerable to flooding.

SOURCE: https://www.news.com.au/finance/real-estate/buying/brisbane-flooding-doesnt-halt-booming-property-market/news-story/ccbdc2a0ea1df903eecfb496f086d39b

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