How Disasters Can't Stop Property Growth

When Cyclone Alfred was bearing down on southern Queensland and northern New South Wales, the impact on the property market was probably not high on the list of considerations for citizens of these areas.

 

But in the aftermath of this major weather event, there will be some thought given to how home values will be impacted by storm damage and floodwaters.

 

The reality is that Australian property markets typically show remarkable resilience in the face of natural disasters, whether they be cyclones, storms, floods, bushfires or periods of drought.

 

Locations with a history of major weather events somehow manage to shrug off those impacts and deliver strong price growth, usually after an initial short-term negative impact.

 

One of the locations affected by Cyclone Alfred was the nation’s unluckiest town, Lismore. The northern NSW town has a history of floods from the Wilsons River, including two major events in 2022 including the record flood in February of that year.

 

Yet in the past 12 months Lismore house markets have shown remarkable recovery.

 

The median price for South Lismore fell from a peak of $460,000 around the time of the 2022 floods to a trough of $195,000 by the end of the year. But in the past 12 months, the median price has risen 26% to reach $330,000.

 

Central Lismore dropped from $575,000 to a trough of $320,000 – but following a remarkable 37% recovery in the past 12 months has reached $505,000 to recoup most of the value that was lost. Lismore Heights was less affected, with values today higher than at the time of the 2022 floods.

 

Gympie, on the Mary River a little north of the Sunshine Coast, has a history of big floods, including a record event in February 2022. But that most recent disaster caused only a minor pause in the growth of Gympie house prices – with its median price rising 11% to $540,000 in the past 12 months (compared to $310,000 four years ago).

 

Townsville in the tropical north of Queensland has a history of cyclones and floods, including a major event in 2019 and recent floods in January-February. Yet it has been one of Australia’s busiest markets and a national leader on price growth in the past two years.

 

Houses are selling is less than two weeks and in the past 12 months most Townsville suburbs have recorded median price rises well above 20%, including some like Garbutt (up 36%) and Rasmussen (33%) lifting more than 30%. Townsville suburbs have averaged price growth of 12-15% per year over the past five years.

 

And of course Brisbane, built on a flood plain, has a considerable track record of floods but continues to deliver price growth. Its median prices rose 10% for houses and 14% for units in the past 12 months, with the median house price now approaching $1 million – well above Melbourne and topped only by Sydney.