Property buyers risking Russian roulette of real estate in flood-ravaged suburbs

It’s the Russian roulette of real estate. Buy one of these homes and you might make a killing – or you could be committing property suicide, writes Ann Wason Moore.

It’s the Russian roulette of real estate.

Buy one of these homes and you might make a killing – or you could be committing property suicide.

Yet it’s easy to see why purchasers are tempted: super-sized blocks of 800 sqm positioned just 100m away from the main river in a tourism and population growth spot.

The price? Brace yourself … $430,000

Sure, the house itself needs a bit of work, but that’s not the fatal flaw in this real estate fantasy.

A Murwillumbah property listed on realestate.com.au.

Indeed, while the location reads like a buyer’s dream, it’s been the previous occupant’s nightmare … situated at ground zero of Murwillumbah’s flood zone.

Despite this colossal catch, the property has already been snapped up by a buyer willing to take this bet.

And it’s not like they weren’t warned.

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“Yes, this house was affected by flood,” reads the ad from the refreshingly honest agent.

“Yes, this house does need work. Yes, you are taking it exactly as it is. Yes, this is an opportunity for someone to bring a house back from the brink and make it their own.

“The house was affected by the record floods earlier this year. The owners have moved on and they want the property gone.

“This is truly a unique opportunity for someone to get into the housing market at an affordable price, take on a project and flip it or keep it for future investment.

“As the heading says ‘Opportunity Opportunity Opportunity’.”

To be honest, I’m not quite sure who has the better deal here – the buyer or seller. Because when it comes to the odds in this property gamble, it’s literally as unpredictable as weather.

Given the forecast is, yet again, for another La Nina summer full of drenching rains and drowning spirits … the outlook doesn’t look great.

Yet $430,000 is still awfully cheap for a region earmarked for great growth.

No matter from which perspective you view this property, it’s a toss up.

But one thing is certain … the inaction of the NSW Government means that both buyers and sellers in flood-affected regions stand to lose.

After all, if the government made a decision on buyback schemes for areas like Murwillumbah, not only would the seller make more than a measly $430,000, but the buyer would be prevented from adding to the number of our future natural disaster victims.

Flooding in Murwillumbah in December 2020. Picture: NCA NewsWire/Steve Holland

If the consensus is that certain areas are prone to further major flooding, why are we still allowing people to move in?

In Lismore last week to hand down the government’s long-awaited response to the independent inquiry into the flood disaster, NSW Premier Dominic Perrottet said there would be an ‘all encompassing’ plan for the region – including raising homes, moving homes and buying back properties at pre-flood values – but did not set a date for when it would begin.

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Yet now that La Nina is again on the horizon, time is literally money. Meanwhile, a tsunami of Northern Rivers properties are hitting the market … meaning a surge in potential new victims.

And it’s those neighbours closest to our Queensland border who are most at-risk of being left in no-man’s land.

Flooding at Lismore in March. Picture: Dan Peled/Getty Images

Mayor of Tweed Shire Chris Cherry, who appeared before the Upper House Committee when it met in Murwillumbah on 1 June, said she was disappointed the Committee did not provide any recommendations or detail for the possibility of land swaps or voluntary house purchase programs for the shire other than to say they should be considered.

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This despite the fact that the Tweed Shire is the most populous local government area in the Northern Rivers and was severely hit by the record February-March flood, with more than 2100 homes damaged and an estimated 1600 residents still displaced by the event.

Council estimates the damage to public infrastructure, including roads and council buildings, will cost up to $100 million to repair.

“As a council, Tweed has strongly advocated for government support to help residents move off the flood plain – this was one of the main recommendations of our submission to the inquiry,” said Cr Cherry.

A father and his young daughter inspect a flooded street at Lismore in March. Picture: Dan Peled/Getty Images

“Residents need answers now as to what options are available to them moving forward. Should they stay and repair their homes or seek compensation and move off the flood plain? We strongly support the latter.”

But until a decision is made, the flow of buyers from the now-unaffordable Gold Coast to the too-good-to-be-true bargains of the Tweed will continue to surge.

If and when disaster strikes again, everyone will lose in this perilous property game.

And that’s a sure thing.

Originally published as Property buyers risking Russian roulette of real estate in flood-ravaged suburbs