Colliers Research Report - Brisbane Apartments Q4 2010

Here are some interesting extracts from the recently released Colliers Brisbane Apartments Q4 Research Report that focuses on off-the-plan sales in the inner Brisbane area.

"Transaction activity in the new Inner Brisbane Apartment market is currently being driven principally by demand from investors. Recently owner-occupiers have been largely absent from the market due in part to expectations of flat prices in the short to medium term, higher borrowing costs and the removal of fiscal stimulus measures.

Currently investors are accounting for 80-90% of all transactions in the new Inner Brisbane apartment market. Investor demand - which is driven largely by rental return and expected capital appreciation - is even stronger for affordable stock (less than $650,000). Notably, the market generally is strong for price-pointed affordable stock.

Returns, which ultimately drive transaction activity for investors, are highly sensitive to both rental values and borrowing costs. Currently, both of these variables are delicately balanced, with rental values sensitive to current and future levels of supply and borrowing costs dependent on the bank’s cost of capital and macroeconomic factors such as inflation. In the near term, investor returns are likely to be driven by rental income rather than capital growth.

Given the current market imbalance, stemming mostly from elevated supply in Inner Brisbane, owner occupiers have become increasingly cautious before committing to purchase. In addition, there is now less urgency to purchase as the strong levels of capital growth witnessed in recent years have dissipated.

Despite the aforementioned threats to performance, the fundamentals of the new Inner Brisbane apartment market remain reasonably solid and underlying demand has held up well. This is reflected by the number of unconditional sales over 2010, which are well above trend levels. However, the ability and/or willingness of both investors and owner-occupiers to purchase has been eroded by increased borrowing costs and expectations in the near term of flat prices and limited rental growth. Whilst some rental markets will be influenced in the short term by home owners displaced by the floods, a sustained increase in tenant demand will be required to deliver solid levels of rental growth.

The annual demand for new apartments in Inner Brisbane is rising, as reflected by the number of unconditional sales reported during 2010 (1,433). The number of transactions in the year to December 2010 is now at its highest level since December 2005 and is well above the long term average for this market. Similarly, demand continued at trend levels over the final quarter of 2010, with 339 unconditional sales.

On the supply side, the number of new apartments available for sale in Inner Brisbane rose to 2,228 during Q4 2010, representing an increase of 24% from the previous quarter. More importantly, available supply is now at its highest level in over 10 years and is well above previous highs observed in 2002 and 2004 (circa 1,500 apartments). Current levels of available supply in Inner Brisbane represent 19 months of demand, based on the average number of unconditional sales witnessed over 2010.

Like many property markets – both residential and commercial - the New Inner Brisbane Apartment market is experiencing the impacts of a misalignment between the business cycle and development cycle. Economic conditions turned down sharply in 2009 and are yet to fully recover, whilst the supply pipeline has retained its strength, resulting in a significant market imbalance.

Most of the new apartments currently for sale in Inner Brisbane are located in the CBD and Inner North, which account for 34% and 41% of the total respectively. Additionally, when we include our estimates of apartments which are likely to be released during 2011, the Inner North and CBD continue to account for the largest share of supply.

The weighted average price of unconditional sales has been trending downward since late 2008. Despite above trend levels of demand during 2010, prices have continued to fall, although the pace of decline has eased significantly. Continued recent falls in the weighted average sale price are a reflection of the large proportion of price pointed affordable stock that transacted during 2009 and 10. The weighted average price of unconditional sales for Inner Brisbane during Q4 2010 was $556,200, a moderate increase from the previous quarter.

The unconditional sales of new apartments in Inner Brisbane during Q4 2010 were comprised largely of affordable stock, with 84% of transactions involving properties less than $650,000 in price. More specifically, 42% of the unconditional sales in the fourth quarter involved properties less than $450,000 in price. Evidently, purchasers continue to be very price conscious and this trend is likely to continue in the near term. Fourth quarter transactions in Inner Brisbane were dominated by one and two bedroom stock, with each category accounting for 45% of the unconditional sales reported.

The number of unconditional sales in the Brisbane CBD rose substantially over the final quarter of 2010, increasing to 94, which is more than twice the average witnessed during 2010 (45). Most of the sales were achieved by Meriton projects, with Infinity and Soleil accounting for 61 and 30 sales respectively. Furthermore, the majority of transactions involved two and one bedroom apartments, with 65% and 21% respectively of the total. The CBD precinct achieved 28% of the sales reported for the new Inner Brisbane Apartment market during Q4 2010 and 12% of the 2010 total. In annual terms there were 179 unconditional sales for the Brisbane CBD during 2010.

The CBD precinct represents a large component of available supply in Inner Brisbane, with 34% of the total (758 apartments). Supply levels are expected to rise substantially during 2011 due to the expected release of some 875 units.

Future Projects

Colliers International Research has estimated approximately 4,000 apartments will be released within Inner Brisbane during 2011.

Approximately 45% of this supply is expected to be located within the Inner North precinct. Madison on Mayne will release the largest number of apartments to the market (286).

The CBD precinct is likely to receive 21% of the potential supply with Camelot providing 420 apartments.

Resales of Existing Apartments

• During the third quarter of 2010, the number of apartments (new and established) which settled in Inner Brisbane fell by 12% to 1,191.
• The number of settlements in Q3 2010 was significantly lower (-23%) than the equivalent quarter of 2009 (1,357).
• Buyers continue to be very price conscious, as reflected by the large number of settlements involving affordable stock, with almost 80% involving apartments less than $600,000 in price."

HTW Month in Review - March 2011

The HTW Month in Review for March 2011 has the following advice:

"In Brisbane it means check your pricepoints, shore up your rental base and see if you can value add. One sector that achieves all three is near city second hand units. These little treasure chests are normally in a three storey walk up design with a couple of bedrooms and a garage or two. This is all within an easy stroll of the really desirable stuff like shops and restaurants. Think Paddington, Auchenflower, Ascot, New Farm, West End and so on. In fact, draw a line around the CBD at about the 5km mark and start hunting. If you can feed off demand from a nearby university or hospital, all the better. If you can also get close to the café centres then you’re on a winner. It is still possible to land yourself in one of these gems for sub $400,000 and it’s amazing what a lick of paint and some new carpets can do for such little cost. If your dollar is a bit tighter try the same sector further out but close to shops and transport. All in all these units give you plenty of long term upside with capital growth and rental return pretty much a sure thing."

"And now, the caveat. We are witnessing a few eager beavers leaping onto flood affected property in the hopes of landing a bargain. We at Herron Todd White Brisbane have been considering discount rates of approximately 10% to 20% for the new wetlands but it must be remembered that there is now a whole heap of potential purchasers who will take years (if ever) to come back to flood effected property. If the 1974 example is set to repeat, there may need to be a generational change in buyers before the market returns to former glories relative to the non flood bricks and mortar. Make your investment a wise one when you start to consider the long term grow."

Gold Coast:

"Prudent buyers are seeking out prime beachside locations and purchasing both units and dwellings at prices up to 50% discount from there peak in late 2007.

The ‘Buyers Market’ which has been created by and oversupply properties has seen a steady decline in value levels throughout late 2010 and into 2011 with Iocal agents reporting buyers are willing to purchase if they feel a large enough discount has been given. This is very evident with local agents advising cash contracts being offered at open homes which are not subject to finance."

Flood Map

Here is another Brisbane flood map for January 2001. It does not easily tell you which buildings had basements that filled with water.

Australand reports...

Mr Fehring, Australand's executive general manager, residential, is reported in the AFR today as saying the margins were improving. However, the Queensland floods had "dampened activity and sentiment in an already subdued market."

Flood Impact to Values

"Valuations on Brisbane homes are expected to decline in the aftermath of the floods, although the final impact for house prices remains unclear. RP Data senior research analyst Cameron Kusher believes Brisbane house prices could fall by as much as 10 per cent over the next few years, but that's against a backdrop of flat house prices nationwide.

“There will be an impact on property located further away from river and low-lying areas that may back onto a creek. People in those areas will find it much harder to sell those properties,” said the Brisbane-based researcher.

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“In the short term, I think there could be some pain. If you don't need to sell, don't.”

Mr Kusher’s estimate of a 10 per cent drop is optimistic compared to Queensland University of Technology’s Professor Chris Eves, who predicted a drop of up to 35 per cent over the next 12 months.

Professor Eves also believes those in low-lying areas away from the river will suffer most.

...

The impact from the flood, which submerged nearly 15,000 homes, has forced valuers to reconsider assumptions about the risks and impact of once-in-a-century level inundations.

University of Queensland property studies professor Clive Warren said he wouldn't be surprised by a fall as much as 10 per cent on properties after the floods.

“Properties below that 1-in-100 [year] line will be blighted to some degree,” he said.

“They may well come off their prices. And people may well choose to go elsewhere.”

Professor Warren said numerous valuers expected a fall of as much as 10 per cent in these properties.

Brisbane home prices have already been tracking sideways for a year. Most recently, they dropped 0.5 per cent in the three months to December, seasonally adjusted, according to RP Data/Rismark. They were at a median price of $435,000, compared to a 0.4 per cent gain in national home prices in the same period, to a median price of $475,000."

See Brisbane Times and also Brisbane Business News

Property Plunge Could Reach 35%

Flood Clean Up Costs

A number of buildings are now realising the costs of flood clean up. I have heard of costs ranging from $400,000 to $10M, depending on the damage. Even buildings with slight damage appear to have huge clean up costs.

Body corporate committees are discussing special levies, in the thousands, for each unit owner.

From what I have heard, some unit owners are obtaining legal advice. Often, the body corporate manager recommends the insurance policy (and takes a large commission). So there is talk of suing the body corporate manager for the loss. In many cases, the developers appear to have been negligent as to where they placed critical equipment. So there may be lawsuits against developers and body corporate managers.

See this article about the Tennyson Reach flood cleanup costs.

Impact of Floods on Property in Brisbane

See The Australian

Floods - Before and After

See

http://www.abc.net.au/news/infographics/qld-floods/beforeafter.htm

and

http://www.abc.net.au/news/infographics/qld-floods/beforeafter2.htm

West End Developments - Flood Issues

""I am aware of four major unit development applications in West End along Montague Road that are currently being assessed by Council planners," said Cr Abrahams. “It is important to take the time to learn why residents of many of the unit blocks along the river in West End are still unable to return to their units. The flooding of the car parks and ground floor units of these apartment buildings was devastating for all unit owners,” said Helen Abrahams.

“Units are still without power, some without sewage services and so property managers have no option but to advise owners not to move back in. Some unit owners whose units were not flooded still do not know when they will be able to return to home," said Helen Abrahams.

“Clearly, it is necessary for a serious review of whether it is appropriate for high rise units along this river bank,” said Cr Abrahams."

Full Story

Flood Update

When driving down Coronation Drive tonight (Monday), some apartment buildings were dark and empty. This included Coronation Residences. Koko apartments at West End were dark, but I understand only the basement was flooded. (Update: As at Australia Day, Koko Apartments were still evacuated; and Pradella's Left Bank carpark was still closed.)

Koko video one, two and river

Eyewitness Photos of Apartments in Floods

Here are some online photos of Brisbane in the floods, showing various apartment buildings in the photos:

By David (showing Festival Towers and Vision hole)

By Kevin (showing Admiralty Two)

By John (showing downtown, Vue and South Bank)

By James (South Brisbane; includes videos)

By John (showing Parklands Sherwood and Fresh Toowong)

By Caron (West End)

By Peter (South Bank and Admiralty)

By Fabienne (Toowong and Regatta)

By Karolina (Admiralty)

By Stacey (city)

Pradella

I repeat this comment from a reader, who purchased at Parklands Sherwood from Pradella, the developer. I agree.

"One has to wonder how the planning controls that regulate development could be allowed to bypass the building flood heights of 1974.

The floods came perilously close to inundation through those long dark hours of the 11/12 January 2011. The townhouses were going under the Resident Manager was knocking on the doors advising all to evacuate. We all wondered what would be the outcome.
Pradella, I wonder….. who you fed your big fat envelope to! When you were spruking to purchasers that the 1974 flood height was to the level of the swimming pool and that the complex would be built 2.5 metres above this height so that there would never be any flood risk.
I was assured when I purchased my apartment Parklands @ Sherwood from Coldwell Banker the selling Agents for Pradella Developments that the complex would not flood as it was built 2.5 metres above the 1974 flood levels. Do you think I would ever waste my money buying an apartment which was in the 1974 flood zone.
Who do you hold responsible? The Developer Pradella, The Water Board!, and/or the Brisbane City Council who aided and abetted in the development.
Why did Queensland Water allow a massive discharge of 645,000 megalitres from Wivenhoe Dam on Tuesday, at the peak of the flood crisis.
Between cleaning up and moving out on Tuesday 12 January 2011, several owners have expressed dismay that the only people that Pradella’s on site Managers addressed was their 30 or so rental Property tenants not once in their address did anyone from PRADELLA acknowledge the huge financial losses now impacting the Owners, nor the disruption to living and the associated expenses imposed as a result of water inundation.
Somebody from Pradella maybe even Mr Kim Pradella himself should explain to property owners the true flood levels and the Council should consider why the development, should have been approved!
Confused – Angry Lot Owner"

Pradella's communication (and that off their onsite managers, Central Apartments, controlled by Pradella), has been hopeless. And it seems that Pradella has a habit of buying cheap land, and then developing. Low & behold, many Pradella apartments have flooded:

Parklands Sherwood: (from the Pradella website): ""20/01/11: Whilst an amazing effort has been undertaken by Building management, Developer staff, tenants and residents, friends of tenants and residents, volunteers and emergency service staff in progressing the cleanup, much work is still required. Damage to services is still being assessed and whilst we hope power may be restored to some of the areas soon, other services and facilities will take considerable time to return to normal.:

Waters Edge (from the Pradella website): "20/01/11: Whilst significant progress has been made on the cleanup effort, the building is still without power and telecommunications due to the damage to equipment in the basement. All residents and tenants have been evacuated and quite obviously due to power issues, the building is not liveable at this point.

West End Central (from the Pradella website): "21/01/11: The clean up continues and the car park is looking better each day. We are hopeful that the repair of the electrical switchboard will commence next week. 20/01/11: Regretfully little change or positive news from what was reported earlier this week. 18/01/11: Whilst no flooding occurred in the lobby, reception pool area or apartments, the property has still been severely affected.

Encore Toowong: Flooded

Tempo West End: Flooded

Left Bank West End: Flooded

Flow West End: Mildly Flooded

The Oracle - Update

SETTLEMENTS for the collapsed $700 million Oracle Broadbeach apartment project on the Gold Coast are likely to be delayed by the Queensland floods.

This is because Brisbane lawyers working on the contracts are unable to return to their flooded city offices, according to the receiver for the project. ... Since October, about 180 of those presales had settled after values of Gold Coast apartments typically fell by 30 per cent since the global financial crisis.

Source: The Australian

When the Water Recedes....

Extract from Brisbane Times article:

The flagging Brisbane property market was not forecast to make substantial gains in 2011. Optimistic forecasts pinned rises at less than five per cent. Property analyst Michael Matusik said the flood was a "game-changer", one that would place a hold on normal market conditions, but only temporarily.

He said the properties completely inundated in low-lying suburbs away from the river, including Rocklea, Oxley and Archerfield, would see a substantial decline in value, but only if they were put on the market before being totally restored.

Meanwhile, the value of the 850-odd exclusive riverfront properties would remain largely unchanged, he said.

"This property is tightly held and most owners are likely to renovate and stay put. Values along the Brisbane River, I don't think are likely to change much," he said.

Still a target

RP Data analyst Cameron Kusher believes future buyers would be motivated by "lifestyle choices" in suburbs including Rosalie, Paddington, Milton, Chelmer and Graceville.

"Buyers will still aspire to buy in these suburbs," he said. "I believe many residents will decide to stay put and rebuild their lives. If people do decide to up and sell they will be in the minority."

Immediately after the 1974 flood many cashed-up investors bought distressed stock, renovated and sold for massive profits after construction of the dam began, Mr Matusik said.

"It does involve risk, but [a risky] investment often means high rewards," he said.

Bargain buying

Mr Matusik said dwellings partially flooded last week, which were put on the market at a 15 to 20 per cent discount from 2010 prices, made for a wise buy.

"For fully flooded homes, discounts over 30 per cent would be worth looking at. This assumes that improvements are actually made, via physical barriers and improvement management systems to help alleviate future flooding."

Mr Molloy warned the financial sector's value of flood-damaged properties was yet to be determined.

However, Mr Matusik said he suspected interest rates would fall by 25 basis points in the coming months, "correcting the unnecessary hike last November".

Rental woes

The rental outlook for tenants and recently displaced flood victims is bleak. Up to 10,000 flood-damaged households are estimated to be looking for temporary accommodation. This combined with the annual influx of university students hunting for rental accommodation will surely push up rents.

"Those investors without landlord insurance might elect to sell their properties, which presents an opportunity for those willing to take a risk.

"A mass investor sell-off, however, could have a marked negative impact on values across the city, making [predicted rent rises] of five to eight per cent very bullish."

Sales to sink

The volume of sales is expected to decline, contrary to last year's predictions.

"The overly negative commentary about the flood's impact on property across the region is likely to batter confidence, which in turn could see inquiry and sales decline further," Mr Matusik said.

Yet Mr Molloy said buyers on the ground were expected to be forgiving.

"The outpouring of community spirit has restored a social confidence in our suburbs. People will remember that for many, many years to come," he said.

Yungaba and The Milton - Flood Issues

Yungaba is an off-the-plan development at Kangaroo Point current being built and marketed by Australand. The Australand Property Group informed the market yesterday that Yungaba would be delayed because of the floods. "That has obviously hampered progress on the project and the full impact is yet to be determined. First settlements are now expected in the first half of 2012 instead of the forecast second half of 2011".

I wonder what people will think of this project now -- I suspect sales may be a little slow for a while.

FKP said it suffered damage to its sales suite at Milton for its overpriced off-the-plan development "The Milton".

Analysts said Mirvac Group faced the risk of a slower sales rate because of the floods.

See also article in The Australian

Tennyson Reach Flooded

Extracts from Story from The Australian:

"Yesterday, as the smell in the luxury dwellings at Tennyson Reach, home to tennis greats including Ashley Cooper, rose with the temperature and humidity, owners wondered how the planning controls that were meant to regulate development could have gone so wrong.

Several said they were assured before buying that the ground level would not flood unless the Brisbane River reached a mark of 8.4m, well above the 4.46m at which it peaked last Thursday after a massive discharge of 645,000 megalitres from Wivenhoe Dam on Tuesday.

Between cleaning up and moving out yesterday, several owners said they needed explanations from Mirvac and the council about their true flood immunity and whether the development, completed less than two years ago, should have been approved, given its history of inundation.

The flooding at Tennyson Reach is one small part of a major problem for Brisbane City Council and the Queensland government, as the losses of owners, the liability of developers, and the policies of governments combine in a perfect storm of recrimination and confusion. The residential precinct went through all the council's usual approvals process after the Beattie government sought tenders to make something glorious from the site of the abandoned and obsolete power station.

Apartment owner Chrissie Buchanan, who bought in June 2009 with her husband, Sam, who is a quadriplegic, has had damaged floors, walls and cabinets. She said she was fortunate to have insurance and was in a lot better position than many in Brisbane.

"The things that have been damaged are easily replaced," Ms Buchanan said. "There are people who have lost their businesses and houses. I feel for people who are a lot worse off than ourselves."

She said flooding risk was "not an issue" that was canvassed when she and her husband bought the property. "You never believe it's going to happen to you," she said.

Keith George, who paid $2.25 million for his ground-floor apartment 18 months ago, said he had waist-level water throughout his property. As a result, he will have to rip up floors and carpets, rebuild walls, and most of the apartment's cabinets will have to be replaced. "I'm going to have to spend at least $100,000 to replace the cabinetry," he said. "We won't be back in here for months."

Mr George said the flood risk never came up when he was buying the property, partly because City Hall had approved the development.

"And I always believed the Wivenhoe would not let the Brisbane River come up," he said.

Another resident, Julie Savage, said most people living in the complex were not too concerned on Tuesday night when other parts of the city started to evacuate their homes.

"I got the impression everyone was relaxed because it could withstand a flood of 8.4m, so it would all be fine," she said.

It is not only residents on the ground floor who are affected, with those on the many levels above unable to return home because there is no power and no lifts working. "They were saying 12 weeks until they can return, but it might be eight," Mr George said.

...

Mirvac Development Queensland chief executive Matthew Wallace, who inspected the development yesterday, said the priority was to work with the body corporate to get the buildings reinstated, and "get peoples' lives and properties back together".

The flooding hit the apartments 12 hours before the peak in Brisbane of 4.46m. It is believed the body corporate does not have flood insurance.

Several owners who bought their apartments before the global financial crisis had looked for loopholes to litigate a way out of their contracts before settlement, but failed after filing actions in the District Court. The irony is that being misled over the level of their flood immunity might have provided a perfect exit.

After successfully defending itself against some residents' claims that it misrepresented the quality of the river views, as well as a host of technical legal arguments surrounding the contract documents, Mirvac said the original buyers had to meet, in some cases, hundreds of thousands of dollars in default interest and associated costs."

Mirvac Group said its Waterfront Newstead development had experienced some basement flooding, while its Tennyson Reach building had basement and ground floor inundation.

Mirvac added that the Brisbane floods were having a limited impact on its residential projects.

Do I Have To Pay Rent If I was Flooded?

I have been asked this question a lot. Do I have to pay rent if the property I lived in has flooded? The most common situation for apartments is that the basement has flooded, but that the apartment itself is ok. The tenant may have evacuated for a week, and there may be a loss of power.

Usually, the tenant can claim against the body corporate and its insurance for the tenant's loss in these circumstances.

The lease does not automatically end. If the lease remains on foot, then in these circumstances, the tenant must still pay the rent, but may try to negotiate a decrease in the rent for the effected period.

If the apartment is non-liveable, then the tenant may end the lease, move out and stop paying rent. If an apartment is without power for a limited period or without a carpark for a limited period, then the apartment is not non-liveable. The RTA says: "Where tenants have been ordered to evacuate their rental property, such as by emergency services, it may or may not be due to non-liveability as the premises may or may not be damaged and the tenant may be able to return to the property after evacuation. This will need to be discussed between the tenant and their lessor/agent. In such circumstances the parties may be best negotiating possible rent reductions, rather than ending the tenancy."

See RTA website.

There is compensation for tenants in these circumstances, of $1,000 per adult effected. See Centrelink.

More on the flood and property prices

The SMH had this story:

Floods Tipped to Hit House Prices

"House prices in Queensland are likely to sink as the financial effects of state's devastating floods strain household budgets and dent banks’ willingness to lend, a ratings agency has warned. ...

LJ Hooker Indooroopilly principal real estate agent Scott Gemmell said it could be 10 to 15 years before some flooded suburbs regain their popularity. ‘‘In the short period it probably scares me a little; what the flood will do to house prices,’’ he said. ‘‘In some cases, houses will be unsellable."

He said he expected a surge in property for sale listings later this month. Mr Gemmell said his office had been inundated with rental inquiries and had compiled a priority list for those affected. ..."

And a similar story: Queensland Rents to Soar, House Prices to Plummet

"... The news is also bad for tenants, with rents expected to soar in line with the surge in demand from displaced residents needing temporary homes. ..."

But, according to another story, landlords will go bankrupt: "Landlords across Queensland are likely to go bankrupt in the next few months, an industry expert has warned."

How will the flood impact property prices in Brisbane?

See this story from Bloomberg. Some extracts:

Property sales will slow significantly over the next month as residents focus on assessing damage and put purchase decisions on hold, said Rod Cornish, Sydney-based head of property research at Macquarie Group Ltd. Buyers are also likely to turn more selective about where they buy properties, avoiding low-lying areas that have been particularly hard hit, he said.

The property market in Brisbane will take some time to rebalance prices, said Gerard Baden, principal at a Century21 Australia real estate franchise in West End, a southwestern suburb of Brisbane that’s bounded by the river on three sides.

“If someone’s selling, what the neighbors’ house sold for last month wouldn’t matter,” Baden said. “And we’ll have a two-speed market. Those properties affected by water, and those that aren’t.”

Brisbane-based Ray White Group has seen “hundreds” of tenants evacuated from properties it manages in the state, said Tony Warland, Queensland chief executive officer for the group.

The Australia also has a story. Some extracts:

The floods are expected to further slash property prices in the southeast, with more than 26,000 homes in Brisbane damaged and the rebuilding process expected to take months. SQM Research managing director Louis Christopher said the residential market in the state's capital was already weak and would be damaged by the worst floods in nearly three decades.

Most property experts said yesterday that it was too early to estimate the exact effect on prices, but all agreed there would be a negative impact on values.

"The immediate impact is going to be that houses which have been impacted directly by the floods that require repairs will likely be taken off the market," Mr Christopher said.

"The floods are going to remind buyers of the risks of buying near the floodplains. There is the risk some of the most prestige areas are going to take a hit because buyers are aware of the risks now of buying there."

Some of the most affluent suburbs in Brisbane -- New Farm, West End, St Lucia, Indooroopilly, Graceville and Chelmer -- have been the most severely affected by the floodwaters. Residex managing director John Edwards said the higher-priced areas would suffer a greater price hit compared with flooded suburbs in Brisbane's outer west and close to Ipswich.

"I think we are going to find that the big pricing adjustments will be the higher-cost areas that are along the river's edge," he said.

Property consultant Michael Matusik agreed in this story that the prestige riverfront market would recover fairly quickly, but said the markets most affected would be low-lying suburbs close to the river that were flooded.

HiDef Aerial Photos of Brisbane 2011 Floods

NearMaps took hidef aerial photographs ("photomaps") of the 2011 Brisbane floods on 13 January 2011. Some examples:

• Tennyson Reach
• Parklands Sherwood
• Regatta area
• Encore and Fresh apartments at Toowong
• Macquarie Street, St Lucia
• Waters Edge and Flow
• SL8, Tempo and LeftBank
• Vue
• SouthBank
• Admiralty precinct