Real Estate

Townsville property market unpredictable following floods

Written by The ReReport
As seen in the Source link, written by on 2019-03-02 05:49:54

Flooding Townsville

Townsville floods. Ross River Dam from a helicopter. Picture: Zak Simmonds

REIQ Townsville Zone chairman Wayne Nicholson says it’s too soon to know what impact the Townsville floods will have on property prices.

JUST a few weeks ago Townsville people were praying for rain as dam levels fell to about 60 per cent. Careful what you wish for. The monsoon brought almost 2m of rain in two weeks.

Old-timers have told me it’s been going on for years and flooding is a way of life here. And I remember growing up in Railway Estate where every wet season the king tides would cause extensive flooding.

I recently saw some photos from 1946, which delivered some extensive flooding to Townsville.

I have been asked what happens now to real estate prices both for sale and for rent.

My answer is “it’s too early to tell”.

Real estate markets function on supply and demand and when the demand is high and the supply is low prices increase.

When the opposite occurs, as what has happened in Townsville over the past 10 years, prices fall for sales and rentals.

We really don’t know how the market will change. My feeling is that rents may rise and maybe we will start to see some investors come back to the table.

General rents in Townsville have fallen over the past five to seven years by between $50 and $100 per week. This has been driven by low confidence, high unemployment and somewhat of an oversupply of property. My concern is rental supplies will not be enough to meet demand in the short term.

We are hoping that short-term solutions can be found for the displaced tenants and owners, and we also hope they are able to move back to their homes in the next few months.

A flooded property that we manage has already been stripped inside, including tiles from the floors, and the builder is moving swiftly to renovate totally.

I have also heard some wild numbers as to how much money will be spent in Townsville over the next few years and they range from $300 million to $1 billion.

Most of that money will stay in Townsville and help our economy which has had its fair share of bad news over the past five years or so.

So for now, let’s look forward to better times ahead.