Floods only short-term dampener
PROPERTY experts are forecasting the floods will only have a short-term impact on Townsville’s property market.
While the floods have caused widespread devastation in Townsville, property markets in areas such as Brisbane that have experienced natural disasters have recovered relatively quickly.
National property analyst and Hotspotting founder Terry Ryder said the impact felt by Townsville’s property market in the aftermath of the floods wouldn’t be long lasting.
“Townsville was moving into a major growth phase and then gets hit by a one-in-100year event,” he said.
“It’s a tough time for Townsville and unfortunate timing and in some ways will provide another setback.
“However, without ignoring the obvious tragedy of the event, the flood will have a relatively short impact on Townsville in terms of market recovery as events like this can put towns into a net positive.
“I have no doubt that the government will be pouring money into Townsville that will generate activities and jobs. It will generate economic activity.
“A place can really thrive when going through recovery.”
REIQ CEO Antonia Mercorella said Brisbane went through a similar flooding event in 2010 and the property market quickly recovered, even in the suburbs hardest hit by the natural disaster.
“In the months immediately following the floods, many houses that were on the market were taken off the market, even if they weren’t flood affected,” she said.
“The market unmistakably lost some momentum and the sales volumes, which were already low in the preceding quarter, plummeted.
“However, over the subsequent years we’ve seen prices recover and growth has returned, even to flood-affected suburbs.”
Ms Mercorella said the suburb of Bulimba, where many waterfront streets went under, had a median house price of $1,150,000 in December 2010 before the floods hit.
It then dropped to $925,000 in the March quarter before growing more than 30 per cent in the following five years to $1,217,500.
Ms Mercorella said agents in Brisbane had reported the floods of 2010 didn’t have a long-term impact on the market.
“Generally speaking, people recognise that the floods in Brisbane were a once-in-a-lifetime event,” she said.
“Speaking to agents who were in Brisbane, working in the most flooded areas, they say that today it’s very rare that people will ask where the floodwaters came up to.”
Ms Mercorella said Brisbane’s market was, like Townsville, at a low point when the floods hit.
“Prior to the floods, the REIQ’S view of the short-term future of the (Townsville) market was cautiously optimistic,” she said.
She said since that forecast, the city had experienced an extremely rare weather event.
“It’s hard to predict how the city’s market will recover. But using the Brisbane experience as a reference point, we can realistically hope that once the floodwaters recede and the clean-up has completed, the market will return to pre-flood conditions, relatively quickly.”