Are Brisbane's flood-prone homes being overlooked in the city's property boom? While Brisbane is experiencing a historic property boom, with house prices soaring and the city becoming the second-most expensive to buy a house in, the specter of floods that devastated properties in 2011 and 2022 still lingers. This raises the question: is there a divide along the Brisbane flood zone? Or is the property market too hot to care?
The elephant in the room, as Lauren McHutchison, a real estate agent in Yeronga, Brisbane's south, puts it, is the flood risk. Many potential buyers have already researched the flood risks associated with these properties, and this information is easily accessible for those interested. Houses in the flood zone of her area tend to sell for a lower price, with about a third fewer interested buyers compared to other listings.
Sarah Bailey, based in Oxley, shares a similar story. Properties in flood zones take longer to sell due to a smaller pool of potential buyers who are risk-averse. However, Oxley remains an attractive area for young families, with good schools and transport links, making it a competitive market for houses despite the 2022 floods.
Despite the uncertainty, house values have continued to rise in flood-prone areas. Data from Cotality shows that the median price for a house in Oxley has risen 16.1% in the past year, with prices in nearby Rocklea, also prone to flooding, rising 18.3% over the same period. Some recent sales of flood zone houses in Oxley have surpassed $1 million, giving Bailey confidence that the market is bouncing back.
Brisbane's median home value rose 1.6% to $1,054,555 in January, according to Cotality. KPMG's residential property outlook forecasts house prices in the city to rise 10.9% this year and 8.9% in 2027.
Jay Shah, who bought a house in Oxley last October, sees the flood zone as an opportunity. He was not deterred by the flood risk, as he was not considering it a major risk factor. The reward of the property market outweighs the risk, and the premiums he paid for insurance were not significantly higher than those for a house that had not historically flooded.
However, for Lisa McKeaten, who sold her house in Oxley late last year, the flooding and insurance were deal-breakers for some interested buyers. She had to manage her expectations about the price she would get for her house, and the final sale price was lower than she had initially hoped for. Despite this, she feels that the house worked out well for her, given the rising insurance costs and her adult children moving out.
