Houses in Lismore’s floodplains have had a sorry couple of years, but now, rebuilt and restyled, floodplain real estate is back in demand.

Cheaper than houses found on higher ground, houses on the floodplain are more desirable for some with the increasing cost of living. That increase in popularity means house prices are now on par with the pre-flood boom.

2021 saw a hike in the price of houses on the real estate market during the COVID-19 global pandemic, but the 2022 floods flattened the real estate market in the Lismore CBD, South Lismore and North Lismore.  

Andrew Gordon from Gordon and Sons Real Estate has seen the highs and lows of many real estate fluctuations.

“Most definitely in 2021, the pricing of real estate in Lismore was just going great. The floodplain itself was seen as a great opportunity to get a start or a great opportunity to invest in. So lots of people were buying in the floodplain.

(We can compare this house in the flood plain as it sold in 2021, and it is on the market again)

“The 22 flood event that changed things somewhat. The floodplain took a hit like most housing in town.”

The unexpected severity of the 2022 floods was seen as a death knell for floodplain properties. Badly damaged facades and foundations, piles of ruined belongings, stories of the loss of security, safety and personal keepsakes were enough to turn people away from the thought.

In more recent times, the cost of living, the lack of housing, the need for a family home and time, have dulled the impacts of the flood. Or perhaps the calculated risk is worth it.

“The floodplain is now coming back. People are proportioning risk, because the Great Australian Dream to put a roof over your family's head. It's alive and well. 

“The floodplain provides that perfect opportunity for those who want to get into the market. It's hard to go straight to Goonellabah and pay nearly a million bucks for a house. You can buy a real cracker for half that in the floodplain.

“In my mind, we've had our Mount Vesuvius. I think people are probably thinking the same way, and that's why homes in the floodplain are sought after.

“We've been in the same office since 1928. The '74 flood saw seven feet of water in this office; the last one was like 20 feet of water. We've had three inches of water in the office. That's just as disruptive, I can assure you. We're still here, anyway.”

(The same house as above, but the 2024 price. This price is considered comparable due to the increased interest rate pressure and cost of living crisis.)

It’s not as simple as being able to buy something you like the look of. The real estate industry has assessed the situation in Lismore, and put some pretty big hurdles in place when you want to buy.

Most lenders will not provide a loan against a damaged house - they generally need a habitable home or cash buyers. Some lenders won’t loan without insurance. Insurance is difficult to find and afford. A mortgage broker knows how to navigate these issues.

Deborah Fredericks of Korff Wealth has been a mortgage broker in Lismore for the last 13 years. She explains some of the difficulties.

“From a lending perspective, they need to understand how a home in the floodplain could impact a loan application, especially with lenders, and how they look at those types of properties.

“Some insurers have put a blanket classification on the 2480 postcode that it's flood-prone. Some properties have never been flood-impacted, so that can be a bit of an issue with being able to obtain an affordable insurance policy. 

“Not all lenders require flood cover depending on an evaluation report that specifies whether a property has been flood impacted, but from an insurance perspective, it can directly impact the cost and availability of insurance over homes in the area.”

Andrew has direct experience with insurance costs elevating, “We had a package through our broker which provided coverage. After the flood, they came up for a renewal. They doubled. They went from $1,900 each to $4,500 each.

“And so I went on to compare insurance and check this out myself. I came back with no comparables for 2480, no one wants you. So, yes, insurance is far more challenging than it was.”

If you are considering purchasing a house in a floodplain, ensure you do your due diligence. Speaking with professionals is the best way to ensure your cost-effective purchase works to your financial advantage. This should include someone who can tell you what the potential flood risk is.