Analysis shows widening gap in post-disaster performance across Australian housing markets
Australia’s residential property markets are showing a clear divergence in how they respond to climate-related disasters, with new research from Cotality indicating that flood-affected coastal suburbs have staged a strong price recovery while many inland centres remain behind their pre-flood peaks.
Marking four years since the 2022 east coast floods, Cotality’s analysis finds that dwellings in flood-impacted sections of coastal markets in South East Queensland generally regained lost ground within about 18 months. On average, values in these locations now sit around 31% above their levels immediately before the floods, pointing to resilient price support in lifestyle-driven markets.
In contrast, numerous inland towns in northern New South Wales have yet to return to their January 2022 values. Many of these markets are still trading below pre-event benchmarks, suggesting a growing divide in how different localities absorb and recover from climate shocks and, by extension, in how they perform as security for residential lending.
Richard Griffiths (pictured right), head of sustainability solutions at Cotality, said the findings have implications for housing markets across the country as more frequent extreme weather affects property owners and borrowers. “This analysis demonstrates that lifestyle-based demand remains a stronger driver of value than climate risk, even where lived experience has shown communities how significant the effects of natural disasters can be,” he said.
“Our analysis shows that communities with deeper buyer demand, stronger amenities and higher value housing stock tend to bounce back far quicker, even when they have sustained significant physical damage from an event. Conversely, flood-affected inland and regional areas have faced prolonged stagnation and, in many cases, values that still haven’t returned to where they were in early 2022."
The analysis highlights coastal suburbs such as Paradise Point, Burleigh Waters, Broadbeach Waters and Hope Island as the strongest performers in the sample. In one case, a flood-affected suburb moved back above its pre-flood valuation within eight months, and now sits roughly 32% higher than before the event.
Source: Cotality
“Buyer willingness to accept environmental risk appears closely tied to lifestyle access, including proximity to water, employment centres and established infrastructure,” Griffiths said.
The story is different in inland housing markets including Lismore, Mullumbimby and Ballina. According to Cotality, these communities have not fully recovered their pre-flood pricing, with the combined inland group still more than 5% below early 2022 values.
Source: Cotality
“Where demand is thinner, recovery is slower,” Griffiths pointed out. “The combination of extensive damage, and persistent risk of disruption in these areas isn’t compensated for by that same lifestyle demand.”
For Griffiths, the emerging pattern from the post-2022 data points to a broader structural issue for the nation’s housing markets. “This is a national challenge,” he said. “As climate events become more frequent, the gap in how Australian communities experience and recover from disaster will only widen, further exacerbating inequality between more desirable coastal communities and rural areas.
“What also remains to be seen is whether more frequent and severe natural disasters may also, eventually, start to negatively impact the rate of recovery even in premium locations.”
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