Brisbane property prices rise in 'high-risk' suburbs as buyers gamble on flood zones
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First home buyers are moving into "high-risk" suburbs that went under water during Brisbane's 2011 floods, with experts saying they are taking a gamble that history will not repeat itself.
A report by real estate analysts RiskWise found 19 of the 20 suburbs affected by the floods had outperformed the rest of Brisbane in terms of price, growing at double the city's five-year average.
"After the 2011 floods the perception among property buyers was these areas would be looked at negatively and prices would fall, or at least deliver very poor capital growth," RiskWise chief executive Doron Peleg said.
Fig Tree Pocket was the top suburb with a growth rate of 52.7 per cent, followed by Bulimba (44.7 per cent) and Yeronga (42.4 per cent).
"Statistically floods like those in 2011 are a once-in-a-50-year event and that makes these homes a risk people are willing to accept," Mr Peleg said.
The RiskWise report urged young home buyers to do a "risk assessment" before they bought into a suburb.
Flood creates opportunities for new buyers
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Homes and businesses in Brisbane inundated by floodwaters on January 12, 2011. (AAP: Dave Hunt)
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Residents and business owners salvage what they can as the floodwaters rise in Rosalie Village in Brisbane on January 12, 2011. (User submitted: Angus Veitch )
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Two men paddle up to the McDonald's store on flooded Milton Road in Brisbane on January 13, 2011. (User submitted: Ben Cotterell )
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The riverside walkway at Pier 9 in Brisbane's CBD goes under as the Brisbane River rises on January 12, 2011. (Giulio Saggin: ABC News)
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Flooded Sylvan Road in the Brisbane suburb of Toowong on January 12, 2011. (ABC News: Jason Rawlins)
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The Little Venice restaurant at Eagle Street in the Brisbane CBD submerged on January 13, 2011. (Audience submitted: Stephen Carter )
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Floodwaters cover Milton Road in the inner-Brisbane suburb of Milton on January 12, 2011. (Jim Whimpey: ABC News)
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A man floats his dog along flooded Railway Terrace in Milton in Brisbane on January 13, 2011. (Ben Cotterell: User submitted)
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A yacht smashed into a submerged walkway that normally runs above the Brisbane River in the CBD on January 12, 2011. (User submitted: Greg Morgan )
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Floodwaters stretch into the distance on Melbourne Street at South Brisbane on January 13, 2011. (ABC News: Giulio Saggin)
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Floodwater creeps up a bench and post boxes in Brisbane's CBD on January 13, 2011. (User submitted: Andrew Kesper )
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A crowd of people gather at the Riverside complex in Brisbane's CBD to photograph damage caused by the swollen Brisbane River on January 13, 2011. (ABC News: Giulio Saggin)
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Floodwaters take over the playground at Orleigh Park in West End in Brisbane on January 11, 2011. (User submitted: Brendan Fearn)
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Floodwaters engulf a backyard clothesline during the Brisbane and Ipswich floods on January 13, 2011. (User submitted: Conan Whitehouse)
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Homes in Ipswich covered by floodwaters on January 12, 2011. (AAP: Dave Hunt)
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Houses swamped at the Ipswich suburb of Goodna, west of Brisbane, on January 13, 2011. (User submitted: Geoff Swift)
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Floodwaters alongside the Ipswich Motorway at the Goodna turn-off, west of Brisbane on January 13, 2011. (User submitted: Geoff Swift)
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Traffic lights stick out from the flooded Ellenborough Street in the Ipswich CBD on January 12, 2011. (Audience submitted: Talitha Rice)
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Silt and mud from the floods that swept through Brisbane and Ipswich spreads out over Moreton Bay, into which the Brisbane River flows, on January 18, 2011. (Sarah Clarke: ABC News)
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A section of the Brisbane Riverwalk floats in Moreton Bay off the coast of Nudgee Beach on January 16, 2011. (Giulio Saggin: ABC News)
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A volunteer throws rubbish into a truck in the flood-hit Brisbane suburb of Graceville on January 16, 2011. (AAP: Dean Lewins)
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Australian army personnel work alongside residents to clear debris from a street in a flood-affected suburb of Brisbane on January 17, 2011. (AAP: Dave Hunt)
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Volunteers help clean a house in Fairfield in Brisbane where mud on the walls shows how high floodwaters rose on January 15, 2011. (ABC: Tim Leslie)
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A mud-covered volunteer helps with the flood clean-up in the Brisbane suburb of Fairfield on January 15, 2011. (ABC: Tim Leslie)
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A man helps in the clean up on Montague Road in Brisbane's West End in the wake of the floods in January 17, 2011. (ABC News: Jennifer Macey)
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Residents and business owners begin the mammoth task of cleaning up their homes and businesses in the suburb of Rosalie in Brisbane on January 14, 2011. (AAP: Dean Lewins)
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Ipswich local and Australian Test cricketer, Shane Watson, bowls during a game of street cricket with local kids amongst flood debris in the Ipswich suburb of North Booval, west of Brisbane, on January 17, 2011. (AAP: Dean Lewins)
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Mud-covered volunteers help clean up in a street in Fairfield in Brisbane on January 15, 2011. (ABC: Tim Leslie)
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A man rests on the back of a truck while helping with the flood clean-up in Fairfield in Brisbane on January 15, 2011. (Tim Leslie: ABC)
The January 2011 floods hit Queensland's south-east and left a trail of destruction, claiming the lives of 36 people.
Thousands of people were forced to evacuate as 30 suburbs were inundated.
First-time home owner Ayelen Mazar-Moreira said people thought she and her husband were crazy when they bought "damaged goods" at Oxley in 2012.
But the mother-of-two said they saw it as an opportunity, and now they have no regrets.
They paid about $350,000 for their three-bedroom, flood-impacted home after a dramatic drop in property prices.
"We weren't in the housing market until we bought this house, and so for us it was definitely an opportunity to get into the housing market because of the price and the location," she said.
"We'd always said we wanted to live in the suburbs but there was never a chance for us to get into that market.
"And this house came up and it was the right price, so we took the chance."
Price gap between suburbs closing
Ray White Sherwood agent Douglas May said the price gap between flood-free and flood-impacted was "definitely closing".
"They see the opportunity for long-term growth buying on the low and it is a risk they are prepared to take," he said.
"Also quite high on their consideration is that the dam and flood mitigation (in 2011) may have been botched.
"So that is certainly something they take into account and put their mind at ease moving forward."
Mr May said the top five questions flood-savvy buyers asked were:
- How significant was the impact on the property?
- Was it from river flooding or from the storm water?
- What post-flood improvements have the owner's made?
- Did insurance cover it?
- How expensive are the insurance premiums now?
Topics: industry, housing-industry, disasters-and-accidents, floods, qld, brisbane-4000, oxley-4075
