Can Brisbane’s property market weather the storm?

When the sun is shining, the economy is thriving, and interest rates are favourable, Brisbane’s real estate market flourishes.

Over the past five years, Brisbane has seen strong property price growth, fuelled by interstate migration, affordability compared to Sydney and Melbourne, and major infrastructure investments.

With climate change leading to more frequent and severe weather events, the question arises: is Brisbane’s property boom sustainable in the long run, or will natural disasters make investors think twice?

A look back: Brisbane’s market performance and major weather events

Brisbane’s property market has performed exceptionally well over the past five years. Even during the Covid pandemic, median house prices surged as demand outstripped supply.

Brisbane’s property values increased by more than 40 per cent from mid-2020 to mid-2022, outpacing most other Australian cities but the city has also had its fair share of major weather events that have tested the resilience of home owners and investors alike.

The 2011 Brisbane floods were a devastating natural disaster that caused widespread destruction and a temporary dip in property prices in flood-affected areas.

History does show that Brisbane’s property market tends to bounce back. By 2013, prices had largely recovered, and in some sought-after suburbs, property values even rose due to increased demand for homes on higher ground.

A similar pattern followed the 2022 floods, which saw thousands of homes inundated across Brisbane and southeast Queensland. While flood-affected properties suffered short-term price drops and rising insurance costs, demand for unaffected homes skyrocketed, further driving up median house prices.

The new threat: Cyclone Alfred and potential insurance nightmare

While flooding has been Brisbane’s primary climate-related concern, Cyclone Alfred is now adding a new dimension of risk.

Unlike North Queensland, Brisbane (nor the Gold Coast in this cas) is not accustomed to cyclonic weather, making the potential destruction from this or future cyclones even more alarming. A cyclone of Alfred’s magnitude could lead to mass evacuations, severe property damage, and prolonged economic disruption.

Adding to the crisis, insurance companies have already placed embargoes on new policies across a 400km stretch of coastline, spanning from Noosa down to Byron Bay.

This means homebuyers who have recently purchased properties are unable to secure home and contents insurance until the embargo is lifted. For buyers who have just signed contracts, this presents a huge financial risk, as they are technically responsible for the property from the moment contracts are exchanged.

Suncorp and other insurers have flat-out rejected applications, citing ‘potential natural disasters’ as the reason. These embargoes, while a common industry practice, are a stark reminder of the growing financial risks associated with home ownership in disaster-prone areas.

The economic and psychological impact on investors

While Brisbane’s property market has always shown resilience, the increasing frequency and intensity of natural disasters could change investor sentiment.

If weather events continue to disrupt lives, increase insurance premiums, and cause financial hardship for homeowners, investors may start looking elsewhere.

Higher insurance costs alone could be a game-changer.

If flood-affected and cyclone-prone areas become uninsurable or insurance costs become unaffordable, buyers will be forced to reconsider purchasing in these locations.

Additionally, ongoing repair and maintenance costs in disaster-hit areas could overshadow potential capital gains.

Will Brisbane’s market weather the storm?

Brisbane has a history of bouncing back from natural disasters, but how many more hits can it take before investor confidence is shaken?

The city has always had a ‘Queenslander resilience’ when it comes to property, with demand rebounding after every setback, however, if extreme weather events become more frequent, we could see a softening in the market as risk-averse buyers opt for safer investments.

The question isn’t just whether Brisbane’s market can survive another disaster—it’s whether buyers and investors will continue to view the city’s property market as a safe bet.

Floods have inundated Brisbane homes since its earliest days, with major events in 1841 (still the highest water levels recorded, at 8.43 metres), 1863, 1893, 1908, 1931. The most recent major floods were 1974, 2011 and 2022.

If weather risks become a persistent concern, we may see more people prioritising properties with climate resilience or even looking to move away from high-risk areas altogether.

In the meantime, while the impending impact of Cyclone Alfred is causing understandable concern, history has shown that Brisbane and the broader South East Queensland property market have remarkable resilience.

Yes, there will be damage, disruptions and economic challenges in the short term, but if past weather events have taught us anything, it’s that the Brisbane market doesn’t break easily.

The probability is high that Brisbane and the SEQ property market will come out of this latest cyclone event bruised but not battered.

In true Queenslander spirit, the region will rebuild, recover and move forward, as it always has. Despite the challenges, it’s going to take more than a rare weather event to dampen Brisbane’s property market for good.