How do bushfires impact property prices: Realestate.com.au's Nerida Conisbee

How do bushfires impact property prices: Realestate.com.au's Nerida Conisbee
How do bushfires impact property prices: Realestate.com.au's Nerida Conisbee

The most recent bushfires in November 2019 have had devastating impacts across NSW and QLD.

Looking back at the impact on property after previous catastrophic fire events shows some distinct trends:

  • The data shows that median house prices are affected by bush fires in many suburbs and regions, although it can vary significantly from one suburb to the next.
  • In the long term, house prices increase faster than the region and state median growth in part because new properties are built, improving the quality of stock in the areas.
  • Bush fire prone areas are often more remote and the properties are fewer and further between, so these factors play more of a part in the fluctuations in price growth, more than the risk of fire. 
  • And, also, because there are few properties per suburb, the property data available is limited.
  • Property views in bush fire areas decrease initially but increase again as time goes by.
  • There is an increase in properties being listed for sale, following a bush fire, presumably because sellers want to leave the area. Although, there are often fewer properties listed in these areas anyway, due to lower population.

Below are some examples of where bush fires have played a part in median house price growth, using realestate.com.au data.

Black Saturday

Median house price growth in many of the towns affected by the Black Saturday fires has exceeded that of the state or regions growth.

For example, the towns below have nearly all seen price growth increases of over 100%, whereas the regions that these towns sit within have not seen anywhere near the same growth.

This is partly because of the rebuilding that took place and stock will now be newer and better quality than before.

Presumably, fire retardant materials and other preventative measures would have been built into the properties, making them more valuable.

It is also likely that many of these suburbs have become more desirable over time for other reasons (e.g., affordability, large homes on large blocks, etc).

Suburb

% growth in house prices over 10 years

Kilmore

66%

Kilmore East

42%

Murrindindi

146%

Kinglake

150%

Kinglake Central

113%

Kinglake West

110%

Strathewen

229%

St Andrews

114%

 

SA4 Region

% growth in house prices over 10 years

Melbourne - North East

76%

Hume

56%

Bunbury fire of 2016

In January 2016, a bushfire affected the Harvey and Waroona areas of WA. It affected 10 towns and destroyed 162 properties.

Below, shows the median price growth the year before and the two years after the fire.

You can see that these towns were showing positive price growth until 2016, in contrast to the growth in Bunbury and WA as a whole.

Then prices were affected at a greater level than the rest of the state.

(data was available for eight of the 10 towns affected)

 

2015

2016

2017

2018

Bushfire affected Towns

2.95%

0.46%

-6.18%

-6.07%

Bunbury SA4

2.56%

-2.50%

-2.56%

-1.32%

WA

-0.20%

-4.62%

-3.16%

-2.17%

Property views for all of the Bunbury suburbs decreased in February, following the fires in January and although the volumes of properties for sale in these areas is always low, there was an increase in average listed properties after the fires.

Tags: 
Bushfires Property Markets

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