LUXURY PROPERTY PRICES in Queensland have plummeted by over 50%, one of the biggest drops in the global market.
Despite being Australia’s fastest growing city Brisbane has seen the price of properties drop by an average of 42% after another year of January flooding.
Heavily hit suburb Ipswich and luxury estates North Booval and Gold Coast saw the biggest drop in the country with prices reduced by 46%-51% on 2010.
Rain has decimated the state of Queensland for the last two years with almost $10 billion worth of real estate damage in 2010 alone. The full costs of this year’s events are currently unknown.
As a result of the floods many are turning to the rental market rather than purchasing real estate. Keith Miller, 32 who recently migrated from Toronto, Canada said:
“Nobody wants to invest huge amounts into a property that could be irreparably damaged,
“As a lot of high end property in Queensland has a water view this is high risk, making insurance and other essentials an increased expense to what I personally would have anticipated.”
Despite these views Cameron Kusher, a senior research analyst for RP Data believes that people have “a short memory” when it comes to natural disasters pinching the purse strings saying:
“If you cut the price enough then any property will sell
Mr Kusher added:
“If it doesn’t flood for another five years or so then people will begin to invest again.”
Australia has long been seen in the other countries as an expat haven, however the strength of the dollar mixed with the property rollercoaster has lead to a decrease in long term immigration and an increase in the number of people returning to their home country.
A recent study from the BBC found that nearly 35% of people migrating to the commonwealth from the UK returned home within 5 years citing reasons from “high basic commodity prices” to “poor infrastructure”.
Despite these startling figures foreign investment still remains as one of the number one targets for luxury property agents. This is due the continued investment in overseas labour within the Queensland mining industry.
As a result of this experts believe that the Queensland luxury property market will stabilise as buyers flock back to the traditional ‘playground of the rich and famous’, Gold Coast and also move into new areas such as the up and coming one million dollar plus New Farm. Real estate entrepreneur John McGrath said:
“People see Queensland as an opportunity, but when belts are tightened (as we have seen) it’s one of the places hit.”
McGrath also pointed to Commonwealth Games visitors in 2018 as a key component in the long term recovery of the area, stating that overselling of the area during the Global Financial Crisis will be forgotten and people will hopefully be attracted to the area once again.