Flood zonings might hit ‘dry’ property values
THE Australia Day floods were a reminder to all home and business owners to not only make sure they were insured against flood damage but to also check if their home or building was in an area designated by local authorities as a "flood zone", land valuers have warned.
CEO of Propell National Valuers, Bart Mead, said there were many homes and buildings throughout Australia located in areas identified as flood zones but which rarely flood.
"Buildings in designated flood zones will have been priced accordingly and therefore are unlikely to change in overall value if they are actually flooded," Mr Mead said.
Although the long-term value of the premises was unlikely to change, Mr Mead said flood damage would hit a building's short-term marketability and a sale price in the near future may not reflect the property's market value.
"Whilst the floods are fresh in people's minds, the affected buildings will, of course, be harder to sell and their marketing period will need to be extended," he said.
"This is why insurance is so important. It can be used to remediate the damage caused by the flood."
Mr Mead said lower sale prices received for flooded properties were mostly a result of flood damage that had not been fixed or a sale date too close to the flood period.