The positive impacts that will occur after the 2022 Brisbane flood event!
By Casey Taylor | Buyers Agent
Natural disaster is an inevitable part of living in Australia, including Brisbane.
A beautiful, wonderful country however it can be a cruel country. Bushfires and flooding have impacted many different areas over the years. This impacts people’s lives through loss of life, loss of all belongings and their homes. With any terrible event or experience there are always opportunities and positives to focus on moving forward.
Today we are discussing the positives that will occur within these areas from a property stand-point. The properties directly affected will obviously not be sold for a period of time, premiums will increase, and some people will be reluctant to purchase these properties. As a Buyer’s Agency we always complete a flood assessment due diligence to ensure in the past in hasn’t been affected by flood.
Ultimately mitigating and reducing our risk that a property we purchase will be affected by flooding in the future. Due diligence is always so important when investing.
Local Economy Mini Boom
Typically, when an area or economy is affected by flooding it will experience a recovery effort in which government assists. This could be in the way of improved infrastructure moving forward or assistance with the homes affected and potential grants given. What will also occur is that individual property owners will begin to spend their insurance money to restore their property or build new homes.
Rental Shortage
There is currently a rental shortage with properties having vacancy rates under 1%. Many families that now can’t live in their homes for a period while repairs are completed, or new homes are built will now look for rental properties. With already extreme low supply levels and further demand for rentals increasing, this will ultimately put upwards pressure on rents. As a landlord you will experience higher yields and higher weekly rents.
Building Supply Shortage
We are currently also experiencing building supply shortages and hence building costs have been increasing over the last couple of years. This will mean that the cost to build a new home will increase furthermore, even though the property is not actually worth more. You are just paying more for the depreciating portion of the asset. This will see further demand for existing properties in existing suburbs.
Tradies with increased Income
In local economies due to the damage Tradies in all industry become busy, generating more work for longer periods of time. This means that Tradies are receiving increases to their income. Tradies with increased income will then spend more money in the local economy for other businesses to then benefit from.
Gentrification
Once owners start to receive their insurance money and renovate their homes, upgrade their homes, or build new homes gentrification occurs. Properties within the suburb become nicer visually and this is contagious as more homeowners begin to do the same.
Gentrification of an area brings further growth to an area as this creates more demand and desire for people to live in these areas.
Past impacts of floods and what followed
Moree is a town located in Northern New South Wales. It experienced a major flood in March of 2021. Moree now in the last 12 months has seen an increase in the median house value of 41%.
Gympie located in the Gympie region of Queensland experienced major floods in the consecutive years of 2011, 2012 and 2013 and in the last 3 years has experienced price growth of 43%.
Townsville QLD experienced flooding in addition to massive storms in February 2019, described as ‘one of the worst natural disasters to ever impact the region’. In 2021 many Townsville suburbs recorded price rises of above 20%.
It’s always important to really dig deep and look at the different factors that will be affected from any event that occurs. Flooding is a terrible situation for anyone who experiences this however with any negative situation there is always positives and opportunity to come from it.
If you have any questions with the information provided in todays blog, or you wanted to have a further discussion around property investing and how we can help you moving forward in your property investing journey please reach out to us at tayloredpropertywealth.com.au.
Need help buying in Brisbane? CLICK HERE ➡️ Buyers Agent Brisbane
🔥🔥🔥
