HOUSE price growth is so watertight in some parts of flood-affected Brisbane, it can take whatever’s thrown at it, come rain, hail or high water.
Market figures show rampaging city housing demand was the driving force behind why even disaster-hit areas that run the risk of future devastation still see house prices bounce back strongly.
Riskwise Property Research chief executive Doron Peleg, whose firm studied the property price impacts of the 2011 Brisbane floods and 2011 Cyclone Yasi along with the 2012 Gippsland Flooding and the 2009 Black Saturday Victoria Bushfires, said it was all about popularity.
“It really depends on the popularity of the areas. We found each of the natural disaster areas that were closer to the CBD delivered higher capital growth than areas that were a greater distance from the CBD. This is despite any unpredictable future impact of floods or fire.”
In Brisbane, it had undertaken a study early this year that found 19 of the 20 suburbs affected by the 2011 floods outperformed the rest of the city.
Five areas did so well they punched way above the city’s five-year growth rates of 26.7 per cent to deliver upwards of a 40 per cent rise in prices.
“This is because these high-flood areas are well located on the river which is in high demand. Also, statistically floods like those in 2011 are a once-in-a-50-year event and that makes these homes a risk people are willing to accept.”
He compared that to the two most impacted areas of Cyclone Yasi — Cassowary Coast and Hinchbrook located about 1225km from the Brisbane CBD — which saw 7.4 per cent and -1.9 per cent respectively, lower than capital growth in the rest of Queensland of 7.5 per cent in the five-year period.
He said some of that impact was also off weakness in the closest major city, Townsville, which had -5.7 per cent capital growth in the period.
The study had found similar popularity-based results out of flood-affected Gippsland, Bass Coast, Baw Baw and Cardinia — located on average 78km from the Melbourne CBD — where the average capital growth in the past five years was 44.6 per cent, beating the rest of Victoria’s benchmark of 31.3 per cent.
In comparison, around 126km from the CBD, houses in Latrobe and South Gippsland — which were also impacted by floodwaters — averaged a relatively low capital growth rate of 19 per cent in the same period.
So too the Victorian Black Saturday bushfires where suburbs that were closer to the Melbourne CBD like Murrindindi and Nillumbik (around 50km away) saw an average 55.6 per cent growth — a much stronger performance than Indigo and Wellington (around 210km from the CBD) which saw 29.3 per cent.
Source: www.news.com.au
