Impact of Floods: The Market Facts
EVERYONE has an opinion on the effect the 2013 flood will have on Bundaberg, especially on the areaCOs house prices.
Nearly four months on, we can look at the facts rather than listen to opinions. Like Brisbane and many others, Bundaberg is a city built either side of a river, with a need for water.
In the rare event of a major flood, the impact on those with water through their homes can be devastating. Thankfully, in these rare events only a small percentage of the cityCOs homes and business are inundated.
The figures released by the council showed about 2000 affected homes and businesses among about 45,000 rateable properties, which included damage from the storms that impacted our coastal areas. This was about 5% of our homes and businesses combined.
And of these 5% of properties directly affected, many did have flood cover and were coming out of the event just fine financially and getting on with life, which is great to see.
For the small percentage that are not covered, my heart goes out to those people affected.
The facts of the effects on our property market are now clear to see.
The people that were displaced by the flood moved in with friends, family and other short term accommodation. These people (who were tenants) then applied to rent another home to live in. BundabergCOs vacancy rate prior to the flood was about 1%.
As a result of these displaced people, our property managers have been swamped with more applicants than available properties.
As a result, the rents have increased by about 10%, generally speaking.
With low interest rates, cash is not king Co many people are scared of the stock market, so property, for many, is the investment to have.
I have had more investor activity than ever, with savvy investors buying entry to median priced properties and putting them on the rental market.
Investors are now enjoying higher yields, as a result of the increase in demand. Our first home buyers that were sitting on the fence have now had the prod they needed to buy their first home. …