Waterfront property has long been sought after by anyone and everyone.
Not only is it a sign of prestige, but it’s desirable to live on a body of water. One has to wonder, though, if the flooding experienced in the past week in many parts of Queensland will change this.
BY VANESSA DE GROOT
Climate change and the threat of rising sea levels in Australia has put somewhat of a dampener on the desirability of waterfront property in recent times, with values potentially being affected by rising water levels.
But the floods in Queensland seem to have highlighted even more the risks that come with having property that fronts the water.
Those homes situated inland in the city, away from the Brisbane River and associated creeks, have fared the best during the floods. In fact, in some parts of Brisbane the worst residents saw of the floods was what was on their television screen. Had it not been for the coverage they perhaps might not have even known about it – particularly those situated on Brisbane’s northside. It’s those homes right on the river – and close to it – that came out the other end with the most damage and they had a front seat view of the full extent of the carnage.
There’s been a lot of talk in the past few days about what impact the floods will have on property values and I’m wondering specifically whether the floods will dampen demand for waterfront properties in the future and whether that will affect values for those homes.
When bushfire disasters have occurred anecdotal evidence shows that over time values rebound and people once again choose to live in affected areas. But will that be the case in a place like Brisbane? Will people forget what’s happened with these floods, just as they seemed to have largely done after the 1974 floods in Queensland? Will waterfront property still be as desirable as it has been?
I know I’d think twice about buying in an area that has been badly affected by floods – and I’d worry that with our weather being so unpredictable, it could happen again at any time.
I’m not so sure others think the same way though, and that may be the saving grace for Brisbane’s waterfront properties, as well as those affected nearby. Those who didn’t live through the 1974 floods probably don’t recognise the full devastation that took place and that may be the case down the track after the current floods.
Another saving grace for affected properties may also be that they don’t have to disclose to buyers whether their house has been flood damaged. If buyers aren’t diligent enough to look into that themselves – and I’m sure there are some down the track who won’t be – then it may not be an issue and property values may not be affected.
Also, not all Queensland waterfront properties have been affected by the latest flood events, or are even at risk, which is where buyer due diligence comes in handy.
What do you think? Do you think waterfront property will be just as sought after in the future as it has been in the past? Or will values be affected by rising sea levels and the potential for flood damage?
Vanessa De Groot is the deputy editor of Australian Property Investor magazine, www.apimagazine.com.au
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Pingback by Tweets that mention Australian Property Investor :: API Property Blog -- Topsy.com — January 19, 2011 @ 2:41 pm
Last week, even before the flood waters had fully subsided, I was contacted by a couple seeking my advice on getting out of their unsettled $3million purchase contract for a riverfront mansion in the Brisbane suburb of Chelmer. The river had lapped at the ground floor but had not entered this home. Nevertheless these buyers, who had entered the contract aware of the property’s flood potential, were now quite spooked not only by the reality of a rising, muddy, debris-filled river encroaching on their future home but also by the realisation that this was not a one-off event – and that the next floods could be higher.
Interestingly, this couple had consulted a conveyancing solicitor before signing their contract, but he did not raise any issue regarding flooding and did not ask if they’d like a flood clause added to their contract!
Comment by Tim O'Dwyer — January 19, 2011 @ 2:46 pm
You have forgotten that inland properties went under also! It’s not just water front properties but low lying properties that you need to be consered about. People just need to do some research for themselves.
Comment by Phil Farmer — January 19, 2011 @ 4:06 pm
I saw some million dollars houses and apartment buildings on the New Farm cliff last week. They are at least 70 meters abover the flood water. It was really cool for the owners to look at the flood river from their window without any worries. I don’t think those property’s market value will go down anyway. So buyers just need to make sure the property has a solid foundation and it is at least 30 meters above the water, then the property value will keep going up and up forever.
Comment by Lynn — January 25, 2011 @ 10:15 am
The council did there best by providing detailed suburb by suburb flood map a few years ago.
Every summer whether its heavy rain or river flood concern, Campbell Newman warns and reminds Brisbane is built on a flood plain.
When you are investing in the most expensive asset in your life, you would think people would choose a patch of dirt on higher ground.
It’s like a Holiday Caravan park / tent site. The edges / higher ground gets taken first and then people who neglect to care and setup on whats left. Even next to the toilets. Cycle of life.
The only difference is that the toilet campers are happy with living on main roads and low lying areas.
Sure its a nice area at Chelmer and Graceville – however, would you be comfortable to raise and family and chance going through the flood all over again?
It will be in the back of there minds, and if it does happy again – values will plummet and they will move away from the area with there tails between there legs.
Australia is large enough to live without the threat – we need to turn these areas into parkland over time.
Comment by Ben — January 27, 2011 @ 9:50 am