Post Cyclone Alfred: Home prices could plummet 45pc

Home prices could fall by up to 45 per cent over the next 12 months in some flood-affected Queensland suburbs if post-disaster history repeats itself.

Exclusive data from PRD analysed 136 suburbs across the state and in northern NSW that were impacted by the 2022 flooding event and found house prices fell in 48 of them over the following year, while unit prices fell in 25 of them.

SCROLL DOWN TO SEE THE HARDEST HIT SUBURBS

Of this list, the southern Brisbane suburb of Willawong was hit the hardest, with its median house price falling about $800,000 in the space of a year from 2022 to 2023; followed by the inner Brisbane suburb of Fortitude Valley.

This five-bedroom house at 22 Kootenay St, Willawong, is on the market for $1.66m.

---

Fortitude Valley’s median house price declined from $2.1m to $1.4m, and in known-flood suburbs such as Archerfield, Wacol, Corinda, Bulimba, Fig tree Pocket, and Mount Ommaney, about $135,000 was wiped off the value of houses in the wake of the 2022 floods.

RELATED: Post flood: Where to next for house prices in southeast QLD

Unit prices in some suburbs felt the impact even harder, with the most affected suburbs being Petrie Terrace, Hemmant, Paddington, and Milton; where the median unit price was slashed as much as 43 per cent.

While prices in many of the affected suburbs bounced back in 2024, some medians are still below pre-2022 flood levels, including house prices in Willawong, Fortitude Valley, Corinda, and Bulimba.

This three-bedroom house at 146 Warry St, Fortitude Valley, is on the market for offers over $1.35m.

---

PRD chief economist Dr Diaswati Mardiasmo said the 2022 flood event coincided with a period when there was still high demand for property in the wake of the pandemic, and a rate hike occurred not long after, which contributed to buyers wanting to get into the market.

As a result, Dr Mardiasmo said prices in some suburbs were not as impacted and many bounced back quickly.

“The Queensland market in 2024 still shows price growth, however at a more subdued level compared to post-pandemic due to higher interest rates and cost of living/affordability pressures,” Dr Mardiasmo said.

This one-bedroom unit at 25/27 Manning St, Milton, is on the market for $550,000.

---

“The market proved to still be sticky in many suburbs, with longer days on market, even with a cash rate cut in February.

“This will have a flow-on effect to any flooded suburbs due to Cyclone Alfred, which combined with higher insurance premiums, will see potentially see price dips for the rest of 2024.”

But Dr Mardiasmo said the housing supply crisis would likely stimulate the price bounce-back in the next 12 months, especially if there were more interest rate cuts.

PRD chief economist Dr Diaswati Mardiasmo.

---

Real Estate Buyers Agents Association of Australia (REBAA) president Melinda Jennison said it was likely buyers would be feeling cautious in the weeks following the storm, which could cause “a stagnation on prices” until confidence was regained.

“I think that consumers and buyers as a whole are becoming more and more aware of flood-impacted properties,” she said.

“The more frequently they occur, the more likely these impacts are going to be cemented in someone’s memory.”

This three-bedroom house at 4 Merewether St, Corinda, is on the market for offers over $900,000.

---

Property valuer, Belinda Botzolis, said that while flood-affected properties suffered short-term price drops and rising insurance costs, demand for unaffected homes skyrocketed after the 2022 Brisbane flood event.

But she said the increasing frequency and intensity of natural disasters could change investor sentiment.

“If weather events continue to disrupt lives, increase insurance premiums, and cause financial hardship for homeowners, investors may start looking elsewhere,” Ms Botzolis said.

This four-bedroom house at 16 Baldwin St, Bulimba, is on the market for offers over $1.7m.

---

“Higher insurance costs alone could be a game-changer. If flood-affected and cyclone-prone areas become uninsurable or insurance costs become unaffordable, buyers will be forced to reconsider purchasing in these locations.

“Additionally, ongoing repair and maintenance costs in disaster-hit areas could overshadow potential capital gains.”

But Propertyology head of research Simon Pressley said the latest natural disaster would have “zero material impact on property market performance”.

“Supply will continue to be incredibly tight,” Mr Pressley said. “The

Propertyology’s head of research Simon Pressley.

---

volume of properties for sale in Hervey Bay, Maryborough, Sunshine Coast, Gold Coast and Brisbane is already at or very near record lows.

“The expected total volume of homes that have experienced major damage is akin to a speck of flour on a baker’s bench. It’s not as if a week of horrible weather forces thousands of people to tip their lives upside down and sell their homes.”

Mr Pressley said those who were unfortunate enough to suffer significant damage to their homes were likely to lodge insurance claims and trigger a “flurry of more work for the already super busy construction sector”.

“Humans are not particularly good at separating their emotional reaction to unpleasant events and appreciating the various major considerations regarding the buying and selling of homes,” he said.