EP. 1213 DOES FLOODING ERODE PROPERTY VALUE? ☔️

Discover the unseen heroes of our city and the stark realities of property values in flood-hit zones as we unpack the catastrophic 200 mil deluge that engulfed our streets. Billy Drury from headline data joins us, offering an insider's perspective on the unparalleled bravery of our SES volunteers. Their superhuman efforts during the darkest hours—fielding over 3,000 calls and executing 160 flood rescues—underscore a commitment to community that leaves us both humbled and in awe. Get ready to salute these remarkable individuals who've shown us what true valor looks like amidst nature's fury.

Navigating through the murky waters of real estate post-flood, we examine the lingering questions that leave property owners wide-eyed: the impact of natural disasters on home value and the daunting future of insurance premiums. With Billy's profound insights, we scrutinize the nitty-gritty of flood frequency estimates and their consequence on council planning and property stakes. Whether you're nestled in a coastal haven or contemplating a move, this episode is a beacon of knowledge, guiding you through the economic aftermath that follows nature's unpredictable wrath.

Transcript

Speaker 1: 0:00

now that was flooding Friday night 200 mil, which is like we can get 200 mil over a course of a month. We got it within 24 hours and today we're going to talk about how that affects property values in the specific areas that flooded. Stay tuned, good morning morning.

Speaker 2: 0:46

Billy Drury with the headline data. The headline data 160 flood rescues over Friday night into Saturday morning. What a weekend for the SES.

Speaker 1: 1:03

They're basically the SAS at this point. Wow, and how many. I think you said there was a bucket load of calls that came in of people in need.

Speaker 2: 1:08

3145 phone calls were attended to, over over 4,000 volunteers hands on deck. What an impressive operation.

Speaker 1: 1:21

Man. These guys are unpaid. They're leaving their kids and their family behind in the middle of the night. They're going out in treacherous conditions in the dark. These are good people. They need a big pat on the back.

Speaker 2: 1:37

Yeah, seriously impressive 160 flood related call outs. A lot of the others could have been fallen trees, power outages, people needing help to get out of property. The list goes on. But yeah, what an operation, Thank you.

Speaker 1: 1:55

I feel like these people are like Superman.

Speaker 2: 1:58

Yeah.

Speaker 1: 1:59

Superwoman. Yeah, can you imagine like you, you know just getting the call, like you get in your car in the rain. You see all your team. You get there, you're told where you got to go and what you got to do. You pick up your tools, your vehicles and out you go.

Speaker 2: 2:20

These guys are good people yeah, and all over the parts of syd Sydney, you know Illawarra, I think a lot of the East Coast got hit bad over the weekend. It was like the merging of two storms coming from up and down the country meeting city in the middle.

Speaker 1: 2:37

It's just nuts. So, yeah, so we wanted to cover how it actually exactly affects property values in specific areas that get flooded. People always ask us the question about flooding. Look, I guess fire comes under the same type of threat Threatened property. Whether it's fire, whether it's flood, we're going to cover this today. What percentage it affects values, how it affects values, how it affects insurance. Um, there's, there's, there's multiple aspects to this um, how people, how these guys specifically deal with it, because our home is the northern beaches and, um, a lot of the northern beaches is flood prone, probably you know, like some of the major suburbs that you drive through Narrabeen, dy, north Manly, parts of Manly, parts of Queenscliff what have I missed? Any other suburbs? Worrywood would be a big one. Worrywood's another one there. So, billy, how do you see it affect the values of the properties?

Speaker 2: 3:50

Well, it's interesting because, first and foremost, if it was that bad and if there was no sort of resolution to the problem, none of these suburbs would be lived in, and every one of those we've just mentioned have got some beautiful property growth. They've got some beautiful properties actually living there on the site which is prone to flooding, and I think what's really important to look at is the 10-year, the 50-year, the 100-year and the 200-year edges that are put in place and the risk assessments edges that are put in place. And you know the risk assessments, because that's what, that's what the council's are looking at when they're talking to anyone looking at buying into the area and building in the area now I'm a little bit of a professor when it comes to flooding, because I did it in high school.

Speaker 2: 4:42

And what were your findings? Because you're a master on Narrabeen Lake.

Speaker 1: 4:47

So I did geology and there was only two schools that did geology for high school, and Cromer High School was one of them and Sydney Boys Grammar was the other. And my major that I did was on narrowbean lakes. Um, now, narrowbean lakes is just a beautiful part of sydney, um, and I think the reality is and I was talking with it, with some friends about it yesterday comparing to the eastern suburbs, the eastern suburbs is primarily covered around by cliffs and you don't get that beauty of low-lying lakes, dams, beaches, and when you don't get that, you just don't get it right, it right. So the northern beaches is quite beautiful because it's got these, these low-lying things like lakes, like dams, but it also then makes you vulnerable to flooding very obvious, right. So, um, I think one's got to ask themselves are they willing to make that sacrifice? And I think you put it well, billy.

Speaker 1: 6:00

Um, there's, there's rankings in um, particular blocks of land, streets, um, where they will rank them as how vulnerable they are, um, extreme or not extreme. That's sort of what people understand. But if you dig a little bit deeper, there is, there is rankings and they will rank it um on a statistically, on, uh, like a one in hundred, you know, a one in hundred year event. This property, you know, is prone to a one in one in hundred, one in three hundred, um, one in uh, three, one in seven. So the odds of that property getting flooded, what are they? Um, you can statistically find that out, but I think on a basic level, council just has low risk, extreme risk, medium risk when it comes to, when it comes to flooding. But I do have to say two years ago on the north coast they got hit by a one in 300. So these are rare, they are whether it's tricky.

Speaker 2: 7:05

How do you put when you're buying, then how do you, how do you work out the percentage that you might be picking up this property at a discount, because that's what you've got to end, you know. Think about when you come to a selling position.

Speaker 1: 7:17

It's all relative yeah, and also I think it um at what you know, is the land going to flood or is the house going to flood At what point is really really interesting for people, because these days, with council, people may not know. Ladies and gentlemen, we're talking about flooding this morning, particularly relevant with what's been happening and how it affects property values. But what people probably don't know is council actually won't allow you to build in areas that are high risk if you are not considering building your height of your structure, your floor level in your structure higher. So these days, if you drive, if you drive past a brand new house in an area that's exposed to flood, you would be shocked. What is exposed to flood? Shocked. But what they're starting to do is the house is sort of 30 centimetres higher off the ground, the whole slab, but the garage is not. So garages are all right, but you know habitable areas have to be higher. You know if you drive. Have you got the photo of the office there, Billy?

Speaker 2: 8:28

Yeah, I do. So. This is the office from the outside. Okay, go on, tell us. I was going to say from the street. It's really interesting. Everyone drives past and panels are raised about a metre actually from street level and you're driving past and you probably don't even turn an eye to it, but DY Pitwater Road corridor is a flood prone area and the reason for the height increase there, and you can see it much better here with the stairs there's the steps up into the front door is because that office space must be elevated so for people that don't know our office, we've got 175 000 cars a day driving down the main road, six lane highway.

Speaker 1: 9:25

Like you would never, ever, ever think that that is a flood prone street dy pitwater road, all of those cars. But when you walk into council and say I want to build, they will make you raise over a meter whatever you build off that ground. Just that's why you can see that tiled area. The actual ground level on that tiled area is 1.2 off the street for that reason. So that's how you can start to spot If you see new structures that are being built higher with the ground level. That's how you can spot them in areas and go aha, now I know how do you tie this back to values before we go, billy.

Speaker 2: 10:10

Well, I guess the question everyone wants to know is your value being affected by flood prone areas. The answer is no because you're actually picking the property up at the discount, all relative, and if you want to tie that back to you know your purchase, there's a, there's a saving there from the beginning and um, you know that carries through obviously on your sales compared to different areas as well.

Speaker 1: 10:38

Mark, if you were comparing narrowing lake and colliery basin yeah, like the colliery basin doesn't flood, it is a premium part of of the northern beaches. It's probably carries, I reckon, extra 20 or 30 premium above narrow bean, even though it's only half a kilometer away, and I think part of the benefit is because it doesn't flood. So I personally believe it's accounted for that. You are buying for discounting. You are getting a discounted product already in those areas. When you sell, you'll pass on similar discounts.

Speaker 1: 11:17

Where I think people really get screwed is when an area completely is blindsided, flash flooded. Um now, I do have to say it's pretty rare because you know geologically it's not hard to work out, given science, what floods and what doesn't flood. So be aware of it when you're buying. It's an easy question to ask insurers. You can ring an insurer even and ask them how much to insure that specific house and they will flag the risk of flood automatically and they will tell you how much they will ensure that property due to that. There's your answer Flooding, fighting, flooding. You know what? Would you buy it? Would you buy a fight affected house? And same with me, I think. I think I'm seasoned. It's a rare occurrence that it happens and I love living close to water and it's just part of it. If you love living close to the bush, you will be exposed to bushfires, and it's part of loving the bush.

Speaker 2: 12:35

Well, stay dry, everyone Stay safe. We're back to blue skies today, so it's good news. Well, stay dry, everyone Stay safe. We're back to blue skies today, so it's good news.

Speaker 1: 12:41

Oh, it's phenomenal how it's changed. Billy, have a great week. Everyone have a great week and thanks for listening. Hopefully we helped you.

Speaker 2: 12:49

See you, bye.