{"id":2035,"date":"2022-03-04T08:59:41","date_gmt":"2022-03-04T08:59:41","guid":{"rendered":"https:\/\/royabhishek.in\/urbanbuyer\/east-coast-floods-and-the-housing-market\/"},"modified":"2022-03-04T08:59:41","modified_gmt":"2022-03-04T08:59:41","slug":"east-coast-floods-and-the-housing-market","status":"publish","type":"post","link":"https:\/\/royabhishek.in\/urbanbuyer\/east-coast-floods-and-the-housing-market\/","title":{"rendered":"East coast floods and the housing market"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<div id=\"toc_container\" class=\"no_bullets\">\n<p class=\"toc_title\">Please use the menu below to navigate to any article section:<\/p>\n<\/div>\n<p><strong>Property market performance across Australia\u2019s east coast, particularly South East Queensland and Northern New South Wales over the past year, could be summarised as having leading price growth, increased auction activity, and favourable internal migration trends. <\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-162121 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/floods2-300x200.jpg\" alt=\"Floods2\" width=\"300\" height=\"200\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/floods2-300x200.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/floods2.jpg 600w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>However, the end of February was a sobering reminder of the impact of <a href=\"https:\/\/www.theguardian.com\/environment\/2022\/feb\/28\/climate-scientists-warn-global-heating-means-australia-facing-more-catastrophic-storms-and-floods\" target=\"_blank\" rel=\"noopener\">extreme weather events and climate change<\/a>.<\/p>\n<p>Numerous enquiries from the industry and media have reached CoreLogic regarding how current floods will impact property values, rents and the availability of dwellings.<\/p>\n<p>Following the Brisbane floods in 2011, the city\u2019s dwelling values sustained a decline from January 2011 to January 2012, which bottomed out at -6.1% (figure 1).<\/p>\n<p><a href=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart01.jpg\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-162117 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart01-1160x601.jpg\" alt=\"Chart01\" width=\"1160\" height=\"601\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart01-1160x601.jpg 1160w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart01-300x155.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart01-1336x692.jpg 1336w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart01.jpg 1425w\" sizes=\"auto, (max-width: 1160px) 100vw, 1160px\"\/><\/a>This decline kicked into recovery mode off the back of several cash rate reductions from November 2011.<\/p>\n<p>However, it was not until March 2014 that the dwelling market fully recovered the value recorded in December 2010.<\/p>\n<h2><span id=\"flood-impact-on-property-values\">Flood impact on property values<\/span><\/h2>\n<p>It is difficult to isolate the impact of flooding on property values, as Brisbane dwelling values were already trending lower from mid-2010.<\/p>\n<p>This decline was triggered by a tightening in monetary policy amid a resources boom and Australia\u2019s recovery from the GFC.<\/p>\n<p>Figure 2 summarises the Greater Brisbane Home Value Index against a selection of eight suburbs that were inundated with flooding in January 2011, showing the change in dwelling values for each market.<\/p>\n<p><a href=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart02.jpg\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-162118 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart02-1160x646.jpg\" alt=\"Chart02\" width=\"1160\" height=\"646\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart02-1160x646.jpg 1160w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart02-300x167.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart02-1243x692.jpg 1243w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart02.jpg 1448w\" sizes=\"auto, (max-width: 1160px) 100vw, 1160px\"\/><\/a>Figure 3 shows the depth of the downturn in values from 2011 and the time taken for each market to recover.<\/p>\n<p>Across the select suburbs, it took an average of 5.1 years for values to recover to January 2011 levels, with flood-affected areas recording a sharper decline in dwelling values than greater Brisbane.<\/p>\n<p><a href=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart03.jpg\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-162119 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart03-1160x613.jpg\" alt=\"Chart03\" width=\"1160\" height=\"613\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart03-1160x613.jpg 1160w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart03-300x159.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/chart03.jpg 1260w\" sizes=\"auto, (max-width: 1160px) 100vw, 1160px\"\/><\/a><\/p>\n<h2><span id=\"value-recovery-period\">Value recovery period<\/span><\/h2>\n<p>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. <\/p>\n<p>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.<\/p>\n<p>Another notable impact on the Brisbane market through this period was a decline in transaction activity.<\/p>\n<p>Through January 2011, monthly sales volumes reached their lowest level over the past 20 years, at 2,115 transactions across Greater Brisbane.<\/p>\n<p>New listings added to the market were also notably lower through January 2011 compared to the previous year (down \u2013 27.8%), but increased remarkably in the following month (jumping 46.8%).<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-155064 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/rental_price_growth-300x211.jpg\" alt=\"Rental Price Growth\" width=\"300\" height=\"211\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/rental_price_growth-300x211.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/rental_price_growth-984x692.jpg 984w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/rental_price_growth-1536x1081.jpg 1536w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/rental_price_growth-1160x816.jpg 1160w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/rental_price_growth.jpg 2000w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/><\/p>\n<p>A similar decline in new listings, followed by a rebound in February was similarly evident in the suburbs presented in Figures 2 and 3, suggesting sales and listings did start to pick up after the event.<\/p>\n<p>Rental values across the eight suburbs analysed from 2011 did not show a decline in the hedonic rental value index.<\/p>\n<p>Instead, rent values increased an average of 4.3% over the year to January 2012.<\/p>\n<p>This may be due to more subdued rental stock levels available at the time, which could have put upward pressure on advertised rents.<\/p>\n<h2><span id=\"then-vs-now\">Then vs Now<\/span><\/h2>\n<p>Perhaps one of the biggest differences between the market in 2011 and 2022 is the length of time between these devastating extreme weather events.<\/p>\n<p>In 2011, major flooding had not affected the region since 1974, and flooding of this nature was considered a \u2018once in a 100-year event.\u2019<\/p>\n<p>For current homeowners, it has been just over 11 years.<\/p>\n<p>This short time frame between significant flooding events could:<\/p>\n<p>\u2022 shift buyer attitudes around housing in low lying areas<\/p>\n<p>\u2022 see markets with low flood risk attract greater demand over time<\/p>\n<p>\u2022 result in higher insurance premiums, which may dissuade buyers from areas vulnerable to flooding<\/p>\n<p>\u2022 elevate repair\/renovation costs at a time when the building industry is already experiencing high demand, and labour and material shortages<\/p>\n<h2><span id=\"the-financial-impact-of-floods\">The financial impact of floods<\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-162122 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/floods3-300x200.jpg\" alt=\"Floods3\" width=\"300\" height=\"200\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/floods3-300x200.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/03\/floods3.jpg 600w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>The cost and implications for the housing market of the current floods are difficult to evaluate, given that for many coastal areas, clean up and damage assessment is yet to commence.<\/p>\n<p>Additionally, the operational environment is very different, with monetary policy more likely to tighten in the next 12 months, as opposed to 2011, when the market was supported by a fall in the cash rate within a year of the flooding event.<\/p>\n<p>Ultimately, this event reinforces the consequences of climate change, which poses a great challenge to the real estate and finance sectors now and in the future.<\/p>\n<h2><span id=\"auction-preview-week-ending-march-6\">Auction Preview \u2014 week ending March 6<\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-155337 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/auction-market-300x225.jpg\" alt=\"Auction Market\" width=\"300\" height=\"225\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/auction-market-300x225.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/auction-market.jpg 800w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>With 3,078 homes scheduled for auction across the combined capital cities, this week\u2019s auction activity is down compared to last week and is the first week on week decrease recorded this year.<\/p>\n<p>Compared to the week prior, when 3,386 auctions were held, auction activity is down 9.1% with each capital city recording a decrease in scheduled auction activity.<\/p>\n<p>While auction volumes are down week-on-week, this week\u2019s scheduled auction volumes are almost double those seen this time last year (1,569).<\/p>\n<p><b>Melbourne<\/b>\u00a0is set to host the most auctions this week, with 1,456 homes scheduled to go under the hammer.<\/p>\n<p>Activity is down 7.5% compared to the previous week (1574) but is just shy of three times the volumes recorded this time last year when 487 auctions were held.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-131533 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/03\/auction-property-300x153.jpg\" alt=\"Auction Property\" width=\"300\" height=\"153\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/03\/auction-property-300x153.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/03\/auction-property.jpg 855w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>Across\u00a0<b>Sydney<\/b>, 1,082 homes are scheduled for auction this week, down 10.0% from the week prior when 1,202 auctions were held.<\/p>\n<p>This week\u2019s scheduled auction volumes are up 37.1% compared to this time last year when 789 auctions were held across the city.<\/p>\n<p>Across the smaller capitals, this week\u2019s expected auction activity is down 11.5% compared to the week prior.<\/p>\n<p><b>Adelaide<\/b>\u00a0will host the most auctions this week, with 200 auctions, overtaking\u00a0<b>Brisbane<\/b>, which had previously held the title of busiest smaller capital for four consecutive weeks.<\/p>\n<p><b>Brisbane and Canberra<\/b>\u00a0are scheduled to host 192 and 138 auctions respectively, though there will be a disruption to auction activity across Brisbane given extreme flooding.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-153523 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/06\/auction-300x200.jpg\" alt=\"Property Auction\" width=\"300\" height=\"200\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/06\/auction-300x200.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/06\/auction.jpg 414w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>CoreLogic\u2019s liaison with real estate agents in Brisbane suggests that some auctions may pivot to in-house or online over the next few days.<\/p>\n<p>In\u00a0<b>Perth<\/b>, eight homes are set to go to auction this week, while two auctions are scheduled for\u00a0<b>Tasmania<\/b>.<\/p>\n<p>As the storm cell that impacted Brisbane and Northern NSW earlier in the week moves south, it is possible that Sydney\u2019s auction market could be impacted over the weekend, with some vendors potentially choosing to reschedule or withdraw from the auction.<\/p>\n<p><span style=\"color: #ff9900;\"><strong>ALSO READ: <\/strong><\/span><a href=\"https:\/\/propertyupdate.com.au\/these-6-major-trends-will-reshape-australias-property-market-in-2022\/\" target=\"_blank\" rel=\"noopener\">These 6 major trends will reshape Australia\u2019s property market in 2022<\/a><\/p>\n<\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/propertyupdate.com.au\/east-coast-floods-and-the-housing-market\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Please use the menu below to navigate to any article section: Property market performance across Australia\u2019s east coast, particularly South East Queensland and Northern New South Wales over the past year, could be summarised as having leading price growth, increased auction activity, and favourable internal migration trends. However, the end of February was a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2036,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22,39,37,38,89],"tags":[],"class_list":["post-2035","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-homepage-top","category-latest","category-property-investment","category-property-management"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>East coast floods and the housing market | Urban Buyer: Buyers Agent &amp; Advocates | Best Property Buyers For You<\/title>\n<meta name=\"description\" content=\"Please use the menu below to navigate to any article section: Property market performance across Australia\u2019s east coast, particularly South East\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/royabhishek.in\/urbanbuyer\/east-coast-floods-and-the-housing-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"East coast floods and the housing market\" \/>\n<meta property=\"og:description\" content=\"Please use the menu below to navigate to any article section: Property market performance across Australia\u2019s east coast, particularly South East\" \/>\n<meta property=\"og:url\" content=\"https:\/\/royabhishek.in\/urbanbuyer\/east-coast-floods-and-the-housing-market\/\" \/>\n<meta property=\"og:site_name\" content=\"Urban Buyer: Buyers Agent &amp; 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