Roads flooded during the 2022 Brisbane floods. Picture: Zak Simmonds.
Queensland’s flood-prone suburbs have lost a staggering $19bn in value, with a third of the state’s properties at risk and some homeowners taking a $1.7m hit.
The Chelmer-Graceville area faces the nation’s biggest penalty for homes in a flood zone, with a more than 10 per cent reduction that equates to $300,000 on average, according to the PropTrack Climate Council Property Value Flood Risk Report.
The report, released today, shows a third of all homes in Queensland, about 803,000, are at risk of flooding, with owners taking a combined $19bn hit as a result — the highest dollar impact of any state.
Flooding in the suburb of Chelmer, Brisbane, in 2022. Picture: Liam Kidston.
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Seven out of the 10 worst areas in Australia for value loss for houses are in the Sunshine State, including Chelmer, Bundaberg, and Buddina, while the dollar impact in the more expensive suburbs of Mermaid Beach and Broadbeach is shockingly high at $1.7m.
When it comes to units, Cairns, Townsville, and Mermaid Waters account for some of the highest losses in the country.
The report is the first to track the nation’s about 2 million homes specifically subject to a flood maps and found the vast majority, about 1.4 million, have lost value as a result of their flood risk.
| SUBURBS WHERE HOMES ARE LOSING THE MOST VALUE DUE TO FLOOD RISK | |||
| Houses | |||
| Suburb | State | Value loss | Average impact |
| Chelmer – Graceville | QLD | 10.60% | $303,000 |
| Bundaberg North | QLD | 9.50% | $59,500 |
| Buddina – Minyama | QLD | 9.50% | $316,500 |
| Pitt Town – McGraths Hill | QLD | 8.70% | $363,500 |
| Lismore | NSW | 8% | $112,000 |
| Mermaid Beach – Broadbeach | QLD | 7.80% | $1,702,000 |
| Johnstone | QLD | 7.80% | $54,500 |
| Emerald | QLD | 6.50% | $43,000 |
| Pimpama – South | QLD | 6.20% | $55,000 |
| Ballina | NSW | 5.40% | $92,000 |
| Source: PropTrack/Climate Council | |||
A typical three-bedroom, two-bathroom house in a flood map area is worth $75,500 less than near neighbours not covered by the map.
Charles Wiggett of Hauss Realty sells property in the Chelmer-Graceville area and said people were still prepared to buy homes with a flood-risk because of their affordability — particularly investors.
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Mr Wiggett, who had sold properties during both the 2011 and 2022 Brisbane floods, said he agreed there would be a price differential depending on the level of inundation, but he was not aware of any homes he had sold being resold at a loss. “The bottom line is risk versus gain,” Mr Wiggett said.
This house at 96 Queen St, Bundaberg North, recently sold for $465,000 despite the block being affected by floods in 2013.
Flooding in Bundaberg in 2013.
With the Government’s National Climate Risk Assessment forecasting property values will lose $611bn by 2050, the impacts on homes are expected to expand — though PropTrack senior economist Eleanor Creagh said reasons why values were suppressed varied and could include insurance premiums, actual physical damage and even just the perception of risk.
“A lot of the regions that have experienced a major flood event are where the discount is largest at the individual property level,” Ms Creagh said.
“In some areas it might be 20 per cent, and in others it’s only 2 per cent. So that does suggest there’s some variation about how the market perceives flood risk.”
Flooding in Graceville Ave, Graceville, in 2022. Picture: Liam Kidston
This house at 86 Sandon St, Graceville recently sold for $950,000 and includes ‘flood resistant features’.
The research also found that around 600,000 homes, about 30 per cent of those subject to flood map overlays around the nation, were unaffected — likely due to homebuyers being willing to overlook the risk in favour if views or lifestyle benefits.
However, once an area has been affected by floods, while it can regain initial lost value, more than a decade on a reduction is still likely to be in place compared to nearby homes not part of local flood maps.
“So that penalty of flood risk remains,” Ms Creagh said.
Ms Creagh said that could be particularly important for areas with high flood risk and lower socio-economic wealth, as they were largely the most impacted, according to the research.
Prop Track senior economist Eleanor Creagh.
This house at 46 Hargreaves Ave, Chelmer, sold for $930,000 after having ‘flood resilient works’ done to it.
She said that showed government spending on prevention of flood damage could effectively reduce the money otherwise needed for recovery efforts after homes were impacted — and agreed that if this boosted home values, it would also increase government revenues through stamp duty and land tax.
“The potential revenue upside could offset any infrastructure spend,” she said.
Climate Council councillor and economics expert Nicki Hutley said while governments had previously only considered the costs of addressing a flood after the fact, the potential for lost revenue was not likely something they had factored in.
“This will be a big eye-opener for governments as to what the potential is,” Ms Hutley said.
“And in terms of what they need to do, because in addition to the disruption to people’s lives and to the economy, the cost from the revenue perspective and the expendature to rebuild —they have a double whammy.
A road in Brisbane closed due to flooding in 2022. Picture: Zak Simmonds.
“If I were them, I would be thinking I would be spending a significant amount of money in building resillience and that could help avoid future losses.”
She added that a $75,500 loss to home values would be playing on the minds of Queenslanders at backyard barbecues around the country.
“I’ve been surprised at how much value is being foregone in terms of people’s homes,” Ms Hutley said.
“And while prices in these areas do keep rising, they certainly don’t rise as fast. While people’s home prices aren’t going backwards, the risk will have stopped things from having gained a certain amount of value.”
With a certain amount of climate change now “baked in”, it was only a matter of time before more extreme weather events caused flood issues for Queensland homes.
This house on the water in Buddina recently sold for $6.1m.
“And that risk pricing will grow as people become more aware,” Ms Hutley said.
While intervention could help reverse some of the home value losses, and save government substantial costs in the aftermath of a flood event, Ms Hutley noted there would be some homes that were simply unable to be shielded as climate change drove worse and worse events.
She said this could lead to flow on impacts to not just the owner whose property became uninsurable and potentially uninhabitable, but also to the banks that had lent to those people.
Despite this, government rebate schemes for homeowners who took on flood mitigation action such as raising the level of their home could be considered alongside more community-centric efforts such as levees.
The research used PropTrack’s Home Price Index that calculates values for all homes in an area based on a variety of data points including recent sales, renovations and wider market trends.
Flood risk data was sourced from Geoscape’s Planning Insights data.
The research goes beyond home sales data and provides value estimates for all residences in an area, regardless of when they last sold.
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