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Brisbane property prices rise in 'high-risk' suburbs as buyers gamble on flood zones

By Allyson Horn and Lexy Hamilton-Smith, Monday June 4, 2018 - 16:05 EST
ABC image
Ayelen Mazar-Moreira and her husband Tiago bought their first home in Oxley, a year after the floods. - ABC

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



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?


- ABC

© ABC 2018

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