The Real Estate Market Two Months on From the February Floods
The February 2022 flood was one of the biggest in the Tweed’s recorded history. Many residents had never experienced anything like it, and we saw many of our friends, family and clients go through the devastating effects.
Even the Tate Brownlee Real Estate office was without power and internet for four days as we scrambled to ensure all those around us were safe and cared for.
The predicted effect that these floods will have on the real estate industry will be long lasting and will influence both the rental and housing market. The question is, in what way?
The lack of housing is not a new problem for the Tweed Coast
The Northern Rivers had a shortfall of 2,300 homes before February’s floods hit. Over the last year, rental vacancy rates in our region have hovered around 0.6%, according to Leo Patterson Ross, chief executive of the Tenants’ Union of NSW.
This compared with a healthy natural vacancy rate of somewhere between 3-5%. This rental market means there are far more tenants than available houses, which inflates prices and makes it extremely difficult and competitive for people to find a home.
Some of this was caused by the Covid pandemic, and some of it just normal movement, as the Tweed Coast and Northern Rivers is a popular semi-retirement area – as well as an attraction to a lot of families given the lifestyle.
So, on top of this already dire market situation, the floods have rendered more than 2,000 homes and businesses in northern New South Wales uninhabitable, further exacerbating the tight supply and demand.
In some areas the demand has been made worse by the fact that temporary accommodation and homeless services themselves have been flooded.
The current Post Flood Rental Market
The thing about real estate, particularly the rental market, is that no matter the circumstances, the show still goes on. Renting out properties is essential – people need places to live, now more than ever.
More than a thousand flood-affected people have been accommodated in hotels and motels funded by the NSW Government.
The focus now is to help people to move out of emergency accommodation and find a more permanent place to call home.
However, two months on from the floods, renters not only have fewer properties to go for but are competing against flood-hit owner-occupiers seeking temporary housing, many of whom are backed by insurance money meaning they can outbid many with higher rent offers.
The issue with this is that after the guaranteed six months of inflated rent being paid by the insurance companies on behalf of their customers, that these tenants cannot afford the price per week on a regular basis after the initial six months of help. This then becomes another issue that the area is yet to deal with.
Locals can not compete with the inflated prices due to supply and demand of interstate cashed up people and insurance payouts that can be high market rent.
The rental crisis now has become an emergency disaster for Tweed as not just locals need to find housing, but all the people also moving to the area as per normal.
Where the Post Flood Housing Market is headed
The Northern Rivers and Gold Coast is built around one of the biggest waterways in the world leaving many parts susceptible to flooding – some of which flooded in February for the first time in decades.
At Tate Brownlee Real Estate, we can appreciate that we have layered issues in the Tweed Coast region and there is not a light at the end of the tunnel just yet. It is a tumultuous market out there at the moment but we are trying to take everyone’s personal situation into account and are doing our best to help everyone we can.
Achieving the best results possible for our surrounding locality is something we take such pride in. We like to be able to help you achieve your property goals, whether you are buying or selling. We are experts in the local area including the flood zones and can give you timely advice on the current market in your area, or the area you are looking to buy in.
Let us open the doors to your future and contact our team today.