House prices in parts of Brisbane can expect to fall by as much as 35 percent as result of the recent floods. Yet we know which suburbs are liable to flooding, so wouldn’t the risk have been factored in to house prices?
Well, no, not for low lying areas away from the river. They are the suburbs that Professor Chris Eves, from the School of Urban Development at Queensland University of Technology, believes will suffer the biggest losses. These areas don’t enjoy the amenity of the river, but still face the risk of flooding. Fortunately for them, evidence of the past shows that the drop is short-lived and prices are likely to bounce back again in a few years.
So, it seems like we have a short term view when considering property investments. That extends to a fairly blinkered view of where we build next. NSW Opposition leader Barry O’Farrell this week outlined his plans to build on Sydney’s city fringe – but he’s talking about agricultural land that is another extensive flood plain.
How many times do we have to get wet before we learn the lesson?