City to ride on a flood of recovery
Aid money will underpin economy
IT COULD take two years for the impacts of the floods to wash through Townsville’s property market, according to Herron Todd White Townsville director Jason Searston.
Commenting on the floods in the firm’s Townsville in Focus report, Mr Searston said that while there had been a devastating human and social impact, it may also “perversely” provide a stimulus to the broader local economy and the property market overall.
“There will be winners and losers throughout the community but the outside injection of funds, from insurance and government sources, will be an overall economic positive for the city as it feeds through into retail sales, repair and reconstruction activities,” Mr Searston said.
He said there was likely to be a period of upheaval and ad- justment in the property market, with transactions driven as much by emotional factors as market fundamentals.
He had heard of some people with flood-affected properties who were looking to buy another home rather than wait for their existing homes to be repaired.
Other people may be reluctant to return to their floodaffected homes, he said.
“There could be a slight premium in the market for a property that was dry and downward pressure (for oth- ers) because they got wet,” Mr Searston said.
It was too early to say how much values would shift, he said.
“It’s intangible at the moment,” he said.
“There’s going to be some pockets that will show softening until a period of time where that stigma will evaporate.
“Based on experience from similar events in other communities, it could be up to two years for the property market adjustment process to run its course.”
Herron Todd White is tipping a “positive outlook” for Townsville for 2019 after the floods and a downturn in commercial and industrial markets that started eight long years ago.
In its report, the firm puts the residential property market at the start of a recovery phase – a position it gauged the market attained in 2017 – while it has kept the commercial and industrial sectors at the bottom of the property cycle, a position it assessed was first achieved in November 2010.
THERE WILL BE WINNERS AND LOSERS THROUGHOUT THE COMMUNITY BUT THE OUTSIDE INJECTION OF FUNDS, FROM INSURANCE AND GOVERNMENT SOURCES, WILL BE AN OVERALL ECONOMIC POSITIVE FOR THE CITY JASON SEARSTON