Calls For Floodplain Building To End
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Calls For Floodplain Building To End

Following the devastation of recent flooding, experts are urging government intervention to drive the cessation of building in areas at risk.

By Terry Christodoulou
Wed, Apr 6, 2022 10:48amGrey Clock 4 min

Despite the watery devastation that has recently plagued much of Australia’s east coast and specifically the Northern Rivers region of NSW, state planning minister, Anthony Roberts, scrapped a requirement to consider the risks of floods and fire before building new homes.

The move by Mr Roberts came just two weeks after the decree came into effect – at the same time the town of Lismore was continuing to clean-up from a first round of flooding that decimated much of the northern NSW town.

Despite bearing direct witness to what played out in Lismore, Mr Roberts revoked the ministerial directive of his predecessor Robert Stokes and which outlined nine principles for sustainable development, including the necessary management of risk pertaining to climate change.

Less than a week on from the decision, Byron Bay and Lismore were inundated with rains (in excess of 400mm in just 25 hours) and further flooding. It also led to the evacuation of more than 2800 people from the region.

A spokesman for Mr Roberts claimed the minister was working to a set of desired principles brought by Premier Dominic Perrottet, “a clear set of priorities to deliver a pipeline of new housing supply and [to] act on housing affordability.”

LISMORE, AUSTRALIA – MARCH 31: Houses are surrounded by floodwater on March 31, 2022 in Lismore, Australia. Evacuation orders have been issued for towns across the NSW Northern Rivers region, with flash flooding expected as heavy rainfall continues. It is the second major flood event for the region this month. (Photo by Dan Peled/Getty Images)

While affordability is a growing issue for the NSW housing market, is the safety and viability of housing in floodplains mutually exclusive from notions of affordability?

Dr Karl Mallon, CEO of Climate Valuation – a climate change risk analysis provider producing reports for financial institutions and home buyers — believes that continued building on flood (and fire) prone areas must cease, calling out repeated government inaction on the matter.

“It’s in everyone’s interests to avoid building on flood plains — long term it’s better for house values, banks, developers but the state government and council set the planning rules,” Dr Mallon told Kanebridge News. “With homes built in flood zones, like they are in Lismore, soon it’s going to become possible to insure them. And if they are impossible to insure, then they are impossible to mortgage and impossible to sell.”

Dr Mallon suggests a strong disconnect — between levels of government and councils, banks, developers and insurers — is ultimately failing homeowners.

“There’s a lot of blind-eye compliance with the government not checking to see if [buildings] are safe and viable, and going forward – especially with the planning requirements scrapped — we’re still building [on] flood plains.

“The bit that’s dangerous is that the developer can build, sell and not be responsible.”

Professor Jamie Pittock from the Australian National University in the Fenner School of Environment and Society agreed, arguing that current reactionary cycle of flooding, clean up and rebuild is harming the livelihoods of Australians.

“Where homes are repeatedly flooded, essentially we are creating poverty traps,” said Professor Pittock.

For Professor Pittock, the solution is simple – stop construction on floodplains and rehome those already living in affected areas.

SYDNEY, AUSTRALIA – MARCH 09: SES survey floodwaters along the Hawkesbury River in Windsor on March 09, 2022 in Sydney, Australia. Flood warnings and evacuation orders remain in place for parts of Sydney’s southwest following heavy rain on Tuesday, while a severe weather warning has also been issued for damaging wind gusts. Prime Minister Scott Morrison has declared a national emergency in response to flooding across New South Wales which allows the government to access more resources, including help from defence forces, for affected communities. (Photo by Lisa Maree Williams/Getty Images)

“It’s critical to help those on the most flood prone lands to relocate. Not only because it keeps people safe but also it is more cost effective than rescuing people on the fly and all the public and private investment in rebuilding,” said Professor Pittock.

“Clearly this is a case where the financial interests of property developers, targeting cheap flat, flood plain land has impacted the political process and approvals that should not have proceeded — where governments have been too spineless to say ‘no.’”

While there’s been no direct federal or state government response to calls for rezoning, Premier Perrottet has just announced a new $112 million ‘Back Home’ grants for Lismore. The scheme provides up to $20,000 to residents whose homes have been declared damaged or destroyed and who are unable to claim insurance or utilise the natural disaster relief fund.

The program is not limited to Lismore, extending to other flood prone areas such as the Hawkesbury, Ballina, Byron, Clarence Valley, Kyogle, Richmond Valley and Tweed local government areas.

For Professor Pittock, prevention is the only effective option — especially in the Hawkesbury Valley where the NSW government has currently paused new developments while it revises its flood strategy.

“In the past year, in the Nepean and Hawkesbury Valley, an area of 600 homes that has been flooded twice in a year and those houses just simply shouldn’t be there,” said Professor Pittock. “There’s a little bit of an upfront public and private cost to help these people relocate, but the long term benefits in terms of safety, lower costs, socioeconomic development really make that worthwhile.”



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How Much House Can I Afford?

Expert tips for prospective buyers looking to purchase a home in 2024.

By Josh Bozin
Fri, Apr 12, 2024 3 min

For aspiring homeowners, be it a first-time buyer, downsizer, or investor, picturing your idea of homeownership bliss is the easy part. But before deliberating on furniture choices or scouting for that perfect neighbourhood coffee, understanding your purchasing power stands out as the most important step in ensuring your success in homeownership.

And with the Australian property market gaining momentum in 2024, there’s never been a better time to come to grips with your financial options.

In 2023, amid the changing financial landscape that saw rising interest rates and the cost of living skyrocket, among other factors, the total amount borrowed for property purchases across Australia was estimated at $300.9 billion, a 12.7 percent decrease from the previous year, according to PEXA’s latest Mortgage Insights Report.

Each mainland state also experienced a decline in new lending, according to the report, with Victoria and New South Wales seeing the biggest drops to $84.1 billion and $109.5 billion, respectively.

While this trend reflects the repercussions of such financial hardships on the everyday Australian, John Morello, director and auctioneer at Jellis Craig, said we’re seeing renewed confidence in the property market during the first quarter of 2024, particularly in Melbourne.

“Auction clearance rates have started the year strongly and consumer sentiment is rising. This lift is driven by cooling inflation and an improved outlook on interest rates. At Jellis Craig, as with the rest of the market, we are experiencing an increase in volume of property compared to the same period in March last year (up 28% in 2024),” Mr Morello said.

“Melbourne’s property market, in particular, is showing its ongoing evolution and resilience.”

PEXA’s report revealed that, while borrowing saw a decrease in 2023 in Australia, Australians still invested $613.0 billion in property purchases in 2023. In 2024, purchasing confidence is only going up, as prospective first home buyers, seasoned downsizers, and savvy investors look to capitalise on a flood of new property hitting the market, coupled with the lowering of interest rates across the board.

“With more certainty in the economic outlook, along with an increase in volume of property available, we are seeing these factors translate to early signs of a boost in confidence in both buyers and sellers,” said Mr Morello.

“Further encouraging data shows that whilst there is more property available to purchase, more people are inspecting property, again indicating that demand has increased broadly across our marketplace.”

If you’re in the market for a new property, the biggest question you must ask yourself is how much house can I afford?

A great starting place is to speak with your mortgage broker or financial professional, who can guide you on your lending options. This is critical, as you need to know what your future repayment options might look like, and ultimately, what you will typically be able to afford.

A useful tool for judging whether you can afford a specific property is to factor in the 28/36 rule — a rough guide that suggests you should not spend more than 28 percent of your gross monthly income on housing, and no more than 36 percent on all debts. Another useful tool is the idea of a debt-to-income ratio (DTI); a formula whereby an individual can divide all of their monthly debt payments by gross monthly income to arrive at a number that one can measure as a way of managing monthly mortgage payments.

Mr Morello emphasised the need to understand affordability and what’s feasible for each individual when looking to make a purchase, no matter the budget, on a property in 2024.

“It’s pivotal to work out what you can afford. Get your finances in order. Consider all associated costs with buying, and research what concessions and grants are available,” said Mr Morello.

“It’s easy for individuals to begin the process today. Start actively searching potential properties on a weekly basis, and research areas you are interested in. Check weekly sales results, attend inspections and auctions, to get a feel for the process. Just remember, it’s important to be really comfortable in understanding your living expenses, and what the ongoing expenses will be once you have bought a property.

“For example, mortgage repayments, council rates, water, power, owners corp fees, insurances, maintenance costs; if you are buying as an investment, the Land Tax payable on that property which is an ongoing tax. There’s many factors to consider.”

To see what’s possible for your specific circumstances, visit our Finance Portal for specific tools, guides and tips—as well as our own mortgage calculator—to assist you on your property journey.

 

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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