THE volatile Queensland property market will take a dramatic hit from the state’s floods.
Tthousands of houses are likely to be pulled from the market and prices forecast to fall as the southeast corner rebuilds.
House prices in Brisbane have already been among the weakest across Australia in the past year, with median prices down nearly 2.7 per cent in the final few months of last year.
The falling prices were exacerbated by a sharp increase in the number of home owners placing property on the market. There were 28,389 houses in Brisbane listed for sale at the end of last year, up 59 per cent on the previous 12 months.
The floods are expected to further slash property prices in the southeast, with more than 26,000 homes in Brisbane damaged and the rebuilding process expected to take months. SQM Research managing director Louis Christopher said the residential market in the state’s capital was already weak and would be damaged by the worst floods in nearly three decades.
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Most property experts said yesterday that it was too early to estimate the exact effect on prices, but all agreed there would be a negative impact on values.
“The immediate impact is going to be that houses which have been impacted directly by the floods that require repairs will likely be taken off the market,” Mr Christopher said.
“The floods are going to remind buyers of the risks of buying near the floodplains. There is the risk some of the most prestige areas are going to take a hit because buyers are aware of the risks now of buying there.”
Some of the most affluent suburbs in Brisbane — New Farm, West End, St Lucia, Indooroopilly, Graceville and Chelmer — have been the most severely affected by the floodwaters. Residex managing director John Edwards said the higher-priced areas would suffer a greater price hit compared with flooded suburbs in Brisbane’s outer west and close to Ipswich.
“I think we are going to find that the big pricing adjustments will be the higher-cost areas that are along the river’s edge,” he said.
“These are the areas that are considered valuable because of their proximity to the river.
“In a lot of those areas the types of housing has changed, too. They were built up on stilts and didn’t flood, but people have filled in underneath and the impact now is more than it has been historically because there has been a change in the design of houses.”
Mr Edwards said property price adjustments usually occurred over six to 12 months, especially for houses that were repaired and then placed up for sale.
Housing Industry Association chief economist Harley Dale said the floods would see a reduction in the number of homes on the market.
However, once damaged houses were repaired it was likely that prices would be restored.
“If there’s a stock of housing that’s been damaged, but not destroyed, it can take a long period of time to prove the dwellings again,” he said. “Once that process is complete, you could see a situation where there is a higher valuation.”