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| Patrick Dixon, a doyen of riverfront sales, on the balcony of a St Lucia home. |
PATRICK Dixon spent his formative years beside the Brisbane River, having mud fights with the neighbours and looking at the flying foxes' evening migration up river every sunset.
But the river has been more important for him as an adult, where he has become Brisbane's leading property agent for riverfront property since the river gained cachet as a place to live in the past two decades. He even has written a book about housing on the Brisbane River.
Now, nearly two years after the floods put some of Brisbane's best waterfront real estate under the water, he sees a recovery in some parts of Brisbane's riverfront market. "Two years isn't really enough to deaden the pain, but the discount that people were demanding after the floods is already decreasing," he says.
He argues that the riverfront property market in Brisbane has been hit in the past few years by a double whammy: first, the global financial crisis, which affected the top end of markets everywhere, and second, the floods of January last year.
Floods have marked Dixon's career. His first job in real estate was at Ray White in Brisbane's CBD in 1974, exactly the same time as Brisbane's other big flood of modern times.
"When showing houses 10 years later, people's first question was about the flood. This time around they're coming back a lot quicker. There's a perception that the flood was caused by bad management of Wivenhoe (Dam), and if that can be fixed up, then waterfront living is fine again.
"But also the river brand is a lot stronger now than it was after 1974. There's been a whole change in Brisbane in attitudes to living on the river now compared with what it was then."
For most of Brisbane's history, the breezy hilltops with their cooling winds were the most desirable places to build, while the river was seen as being on the flats. Dixon traces the change in attitude to 1988, when the Expo was held at a large site beside the Brisbane River directly opposite the CBD, and locals as well as visitors suddenly saw the big advantages of a lifestyle beside the river.
As Brisbane grew quickly throughout the 1990s and 2000s, property fronting the Brisbane River became particularly desirable, with many of the newly rich moving there rather than the high hills of suburbs such as Ascot.
Mining billionaires Clive Palmer and Peter Bond live on the river at Fig Tree Pocket, while Australian Rugby League Commission chairman John Grant, who is also a successful businessman, lives on the river at Chelmer.
But the flood made a big psychological impact. The 1974 flood hit far more of Brisbane than last year's flood did, and suburbs below the CBD were hardly affected last year although those farther upstream were probably affected more.
The impact of the recent flood is seen from activity in waterfront housing. In 2007, there were 49 houses sold on the river; 29 in 2008; 34 in 2009; and 38 in 2010. But last year, the year after the flood, there were only 20 houses sold. There is a slight recovery evident this year. In the first eight months, 18 houses were sold, so between 27 and 30 should be sold across the full year. While movement is returning, activity is still well below pre-flood levels.
This is not solely because of the flood, as the entire top end of Brisbane's real estate market has trended downwards in the past few years, as indeed it has all across the country.
Dixon says that even before last year's flood, people were prepared to pay a premium of 5-10 per cent for a flood-free block - that is, one that did not go underwater in 1974. That premium rocketed up last year, but Dixon says it has now come back to about 15-20 per cent.
Straight after the floods, some people sold their houses complete with mud and debris, while others restored them to the state they were in before the flood. It's the latter group that will be coming on to the market in the next few years and the longer the time distance from the floods, the better the price will be.
"The interesting thing is that it's the former group who generally did better, as competition by builders and amateur home renovators resulted in premiums not experienced by sellers who restored their homes," Dixon says. "The latter had buyers worried about a recurrence of the flood while the former had anxious buyers looking to secure a low-entry price foothold on to the Brisbane River."
Already this year, there have been four sales of more than $5 million for riverfront property, but these were all on non-flood-affected sites. The real test will come in the next 12 months when renovated flood-affected properties come on the market.
www.TheAustralian.com.au
18.10.12
