Buyer’s agents have weighed in on how floods in Queensland will affect the booming Brisbane and Queensland property market. The lessons that were learnt in the aftermath of the 2011 floods are looming large over homebuyers and investors looking to start investing in the sunshine state.
Investors were expecting to see strong rental gains moving forward in Brisbane. Given Brisbane’s already tight vacancy rate, is expected to be hit even harder when insurers begin to look to relocate families affected by the flood into short-term accommodation. Over 15,000 homes in Brisbane saw the waterlogging of their yards and roughly 1400 homes had water above the floorboards.
Pete Wargent is a co-founder of BuyersBuyers. He said that they expected disruption to open homes, but the inquiry level had not declined due to the floods.
“We did some research on the most flooded areas after 2011, and of the top 20 most impacted suburbs, 19 of them outperformed over the following five years,” he said. “So, most likely people will look through the short-term impacts, is my guess.”
RiskWise Property Research showed suburbs impacted by the 2011 floods outperformed the rest of the market, with some areas like Fig Tree Pocket seeing housing prices rise as much as 52%.
Mr. Wargent said in the short term their main focus will be issued around safety, repairs, and insurance.
“In flood areas, there will be a short-term impact. The rest of the city will be back to normal fairly quickly. Maybe even a bit of a supply crunch for rentals in the short term,” Mr. Wargent said.
Cohen Handler agent Jordan Navybox claims there has been no drop in investor inquiries for Brisbane.
“All of our clients this morning are still very interested to buy in Brisbane,” he said. “As we always have and will continue to do, where possible, we avoid properties in areas impacted by floods.”
“Brisbane City Council has got quite a good tool to search which properties are affected more than others. Obviously, it’s very sad what’s happened to a lot of people. The effect on the property market will be seen in the coming months.”
Mr. Navybox also said that there was a fair bit of concern over the rebuilding impacts, considering the building industry is already under a lot of strain.
“Once insurance companies get through all the claims that will be made in the next two weeks, it will be interesting to see how quickly a lot of this remedial work can be done.”
“In the short term, Brisbane is already in a housing shortage. Now we’ve got to relocate any flood-affected victims, and where are they going to stay? Fortunately, a lot are having their rent paid by insurance companies, but regardless they have got to find accommodation and that will put pressure on the property market. I believe we will see rents increase due to this, which is what investors look at.”
In terms of buyers getting turned off by flooding suburbs, Mr. Navybox believes it will probably push those who were sitting on the fence towards a decision.
“If anyone was cautious about buying in a flood zone or not last week, they definitely will not now. If someone was looking at a flood map last week, this morning, I can nearly guarantee they won’t be buying that property. I don’t believe that turns them away from Brisbane though, as there are still opportunities to purchase non-affected properties.”
Mr. Navybox Recommends buyers look at the Brisbane city council flood maps when making decisions on where to buy.
“It’s incredibly sad to see how many people have been affected,” he said, however, the main thing is this is something that Queenslanders are prepared for and used to and the Brisbane City Council has done a great job making people aware of the risks with mapping.”
Suncorp Group (includes Suncorp Insurance, AAMI and GIO) has several teams already working with customers in the flood-affected parts of southeast Queensland. On Saturday, Suncorp Group CEO Steve Johnston reassured customers that “once floodwaters recede, we can arrange emergency repairs, organise temporary accommodation for customers whose homes have been severely damaged, and provide cash payments to make emergency purchases”.