The recent and ongoing bushfires in Australia are leaving a devastating impact on our people, property and wildlife.
Unfortunately, they also leave a negative impact on property values.
According to Suburbanite Principal, Property Economist and Commentator, Anna Porter, the fires can impact property values and even the homes that are spared can be financially hit if they are close to areas that are impacted by the bush fires.
“The market will shy away from bush fire prone property for 6-12 months after a major fire incident and this is even more so the case in the metro or suburban areas than the country as people have more choices to buy away from the bush in metro areas,” says Porter.
“We’ll likely see a decline in interest in property around Turramurra and The Royal National Park after recent incidents.”
Anna Porter believes what once may have attracted a premium price for bush views can quickly become the reason a property won’t sell.
“Price discounting can be the only way to move the property if you have to sell in these areas,” she says.
“Holding on to the property for 12 months or more after a major fire event can help ease the pricing pain as the market is quick to forget and prices will readjust again.”
Anna stresses that not all home owners have that luxury and often in the case of incidents like this, families are in a distressed position and must sell.
“The home owners that can get really stuck are the ones who lost their home but don’t have sufficient insurance coverage to rebuild,” says Porter.
“A vacant block affected by recent fires can be very hard to sell.”
Anna also warns anyone looking to tap into a distressed sale to ‘bag a bargain’ to ensure they do their due diligence and assess the actual condition of the property and surrounding land before making any decisions.
Building a home to bushfire requirements with fire resistant materials can add as much as 25% to the build cost.
“For anyone living in a bush fire prone area, or building a new home in a fire zone they should consider some of the following options to help make their home not only safer but more appealing to the market on resale,” she says.
Here are Anna’s tips:
- Build with fire rated materials like hebel
- Put in sprinkler systems on the perimeter and a water tank that can be used in case of fire
- An underground ‘safe room’ that has been designed to protect people or property in a fire and has appropriate ventilation. This should be designed with guidance from a fire specialist.
- Clear as much vegetation as you can around buildings to create a buffer zone
“All of this should be done in consultation with a fire consultant to make sure you get it right. Being fire smart is a ‘must do’ with a new build but home owner should also consider what they can do to retrofit some of these measures on existing homes in fire areas,” says Porter.
“Firstly, to help protect you, but also will be a big step to overcoming objections from buyers when you do look to sell and will ensure the value of your home is maintained.”