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As northern NSW comes to term with a second major flood in four weeks, growing concerns over property values and defaults are mounting.
While the town of Lismore is prone to flooding, three major floods in a five-year period will be a steep hurdle to overcome, with many only just finished cleaning after the February floods.
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The intense rainfall, across northern NSW on Tuesday (29 March) and into Wednesday (30 March), saw the flood levee at Wilson River in Lismore almost reach 12 metres (11.4 metres), a near-record level alongside the 14-metre mark reached in February, according to the Bureau of Meteorology.
As the second round of clean up begins, chief executive of distribution at Lendi Group Brad Cramb posted a tribute on his LinkedIn social media account acknowledging the “incredible hardship” being faced by these areas, including Aussie brokers.
“Our hearts at Lendi Group go out to everybody impacted, particularly Sana and the team at Aussie Northern Rivers in Lismore whose store has sustained significant flood-damage for the second time since 2017,” Mr Cramb said.
“Unfortunately, insurance cover is not offered for floods in their region, leaving the cost of rebuilding solely on small business owners.”
Mr Cramb directed people to a GoFundMe campaign, pledging the Lendi Group would match “every donation dollar-for-dollar” up to $25,000.
The sheer scale of the recent flood events in Queensland and NSW has sparked an NSW inquiry into the causes of, preparedness for, and response to the “catastrophic” event that will leave a damage bill topping $1 billion.
The Insurance Council of Australia has reported more than 160,000 claims since the February flooding, with just 5 per cent closed.
Defaults inevitable
Lennox Head broker Zain Peart at ZEP Finance said the enormity of building and construction that is needed, alongside a shortage of builders will put an immense challenge on the community and fears some won't be able to recover.
There will “absolutely” be some defaults, he said.
“I had one client call up and was pretty much crying, just saying ‘I’m never going back to my house again,’” Mr Peart said following last month’s floods.
“She’s hoping that she’ll get the insurance payout and maybe enough to clear the loan and to just leave it and won’t go back.
“It’s pretty horrible,” Mr Peart said.
Mr Peart said people are searching for finance options to rebuild, move, or get back in.
“It’s different for every person," Mr Peart said.
Property values ‘bounce back’
While selling immediately post a disaster won’t get you the “best price”, chief economist at Ray White, Nerida Conisbee said the property market does tend to “bounce back”.
After the Brisbane 2011 floods, significant government expenditure on flood infrastructure alongside homes being rebuilt better, meant property values did return.
“Areas that were badly impacted did see a drop in values but the values of those properties did bounce back pretty quickly and most of those areas have gone on to achieve incredibly strong price growth,” she said.
Similarly in Mallacoota in Victoria, which was decimated during the Black Summer bushfires, properties were rebuilt to withstand more weather events, and saw prices rise to above 70 per cent during the pandemic.
Whether it’s the bush, coast or river frontage people are attracted to living in areas surrounded by nature and with that comes some level of risk, Ms Conisbee said.
Read the full feature report on the impact of flooding on the housing market here
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