Natural disasters are changing attitudes to long term property values | Kanebridge News
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Natural disasters are changing attitudes to long term property values

Australian property values usually rebound quickly after natural disasters, but not this time

Thu, Mar 2, 2023 10:32amGrey Clock 2 min

Flooding is beginning to have long term effects on property values, a new report from CoreLogic reveals.

The East Coast Floods – One Year One report examined the impacts of the extreme weather events on the Richmond-Tweed area (also known as the Northern Rivers region) on the far north coast of NSW, as well as the Brisbane region in early 2022, which some described as a ‘rain bomb’.

The report, authored by Corelogic economist Kaytlin Ezzy, said while residential values were historically fairly resilient following flooding events, recovering within three to five years, the 2022 disaster had changed perceptions among homeowners and potential buyers.

“Attitudes towards flood-prone areas, and climate risk in general, are changing,” the report said. “Homeowners, lenders and insurers are becoming more cautious of the risks associated with climate change and are adjusting their risk premiums accordingly. For some impacted homeowners, the risk of another flood is likely to be top of mind, and we could see a number of residents accept government buy-back offers where they are available. 

“For others, the increased costs of insurance could price out existing owners and dissuade new buyers from areas vulnerable to flooding.”

The report noted that while the Insurance Council of Australia had closed 80 percent of claims from the events, which are estimated to have cost $5.7 billion – Australia’s most expensive natural disaster on record – that was only part of the story.

“A sizable number of people are still waiting for building repairs to start, while other uninsured residents have been left with limited resources to undertake repairs,” the report said. “Government intentions around buy backs are still playing out and the number of post flood home sales is still low. 

“The full impact of the floods won’t be known until these factors have played out.”

Using satellite imagery, CoreLogic has zeroed in on areas most affected by floods. Perhaps unsurprisingly, flood-prone areas such as South Lismore and North Lismore recorded flooding across 80.8 percent and 70.1 percent of properties respectively. The news was similarly grim in West Ballina, where 56 percent of properties were impacted.

However, areas considered low risk, such as Girards Hill (35.1 percent) and East Lismore (22.4 percent) were also heavily affected.

In the Byron Bay region, Mullumbimby experienced the highest numbers, with 17.4 percent of properties impacted by flooding.

The impact on values has been immediate, and not just in those areas directly affected by floods, CoreLogic data reveals.

“Mullumbimby recorded the largest 12-month decline nationally, down -30.1 percent, roughly equivalent to a $432,000 decline in the median value, followed by South Lismore (-27.0 percent), Ocean Shores (-26.8 percent) and Byron Bay (-25.4 percent). The other impacted suburbs saw values fall between -22 percent and -25 percent,” the report said. 

“Interestingly, a number of suburbs that were relatively unimpacted by flooding also recorded significant declines. Values across Bangalow, Lismore Heights and Suffolk Park fell by -28.4 percent, -25.7 percent, and -24.3 percent, respectively, and East Ballina and Alstonville recorded slightly smaller declines of -20.2 percent and -19.6 percent.” 

While it noted that reduced economic activity across the whole region was a likely contributing factor, the report said that the decline had been less in Lismore’s elevated suburbs of Goonellabah which recorded a milder -7.2 percent drop in values, as well as a number of surrounding farming communities where declines were less severe. 


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In signs that confidence is returning to the Australian property market, the combined capitals recorded their highest preliminary clearance rates since April last year, CoreLogic reports.

More than 2,290 homes went to market across capital cities last weekend with early data revealing a 71 percent clearance rate. This compares with a revised clearance rate of 64.2 percent last week. It marks the second busiest auction week to date this year.

Melbourne led the way, with 1,122 homes taken to auction. Of the 916 results collected so far, 73.5 percent were successful. It was a similar story in Sydney, with 791 homes to go under the hammer. Preliminary results indicate a clearance rate of 71.5 percent.

The smaller capitals including Brisbane, Adelaide and Canberra all experienced higher clearance rates week on week, with Adelaide out in front at 78.6 percent. It was a less spectacular result in Canberra, with a 59 percent clearance rate and in Brisbane at 56 percent.

In Perth, just three of the 13 auctions tallied so far were successful.

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