IDEAS home Printed from https://ideas.repec.org/a/spr/nathaz/v71y2014i3p1519-1536.html
   My bibliography  Save this article

Assessing the immediate and short-term impact of flooding on residential property participant behaviour

Author

Listed:
  • Chris Eves
  • Sara Wilkinson

Abstract

The past decade has seen an increase in the number of significant natural disasters that have caused considerable loss of life as well as damage to all property markets in the affected areas. In many cases, these natural disasters have not only caused significant property damage, but in numerous cases, have resulted in the total destruction of the property in the location. With these disasters attracting considerable media attention, the public are more aware of where these affected property markets are, as well as the overall damage to properties that have been damaged or destroyed. This heightened level of awareness has to have an impact on the participants in the property market, whether a developer, vendor seller or investor. To assess this issue, a residential property market that has been affected by a significant natural disaster over the past 2 years has been analysed to determine the overall impact of the disaster on buyer, renter and vendor behaviour, as well as prices in these residential markets. This paper is based on data from the Brisbane flood in January 2011. This natural disaster resulted in loss of life and partial and total devastation of considerable residential property sectors. Data for the research have been based on the residential sales and rental listings for each week of the study period to determine the level of activity in the specific property sectors, and these are also compared to the median house prices for the various suburbs for the same period based on suburbs being either flood affected or flood free. As there are 48 suburbs included in the study, it has been possible to group these suburbs on a socio-economic basis to determine possible differences due to location and value. Data were accessed from realestate.com.au, a free real estate site that provides details of current rental and sales listings on a suburb basis, RP Data a commercial property sales database and the Australian Bureau of Statistics. The paper found that sales listings fell immediately after the flood in the affected areas, but there was no corresponding fall or increase in sales listings in the flood-free suburbs. There was a significant decrease in the number of rental listings follow the flood as affected parties sought alternate accommodation. The greatest fall in rental listings was in areas close to the flood-affected suburbs indicating the desire to be close to the flooded property during the repair period. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Chris Eves & Sara Wilkinson, 2014. "Assessing the immediate and short-term impact of flooding on residential property participant behaviour," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 71(3), pages 1519-1536, April.
  • Handle: RePEc:spr:nathaz:v:71:y:2014:i:3:p:1519-1536
    DOI: 10.1007/s11069-013-0961-y
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11069-013-0961-y
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s11069-013-0961-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Andrew C. Worthington, 2008. "The impact of natural events and disasters on the Australian stock market: a GARCH-M analysis of storms, floods, cyclones, earthquakes and bushfires," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 10(1), pages 1-10.
    2. S. Jonkman, 2005. "Global Perspectives on Loss of Human Life Caused by Floods," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 34(2), pages 151-175, February.
    3. Chris Eves & Stephen Brown, 2002. "The Impact of Flooding on Residential Property Values in England," ERES eres2002_153, European Real Estate Society (ERES).
    4. Terrance R. Skantz & Thomas H. Strickland, 1987. "House Prices and a Flood Event: An Empirical Investigation of Market Efficiency," Journal of Real Estate Research, American Real Estate Society, vol. 2(2), pages 75-83.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pilar Lopez-Llompart & G. Mathias Kondolf, 2016. "Encroachments in floodways of the Mississippi River and Tributaries Project," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 81(1), pages 513-542, March.
    2. Guangxi Cao & Wei Xu & Yu Guo, 2015. "Effects of climatic events on the Chinese stock market: applying event analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 77(3), pages 1979-1992, July.
    3. Małgorzata Dudzińska & Barbara Prus & Radosław Cellmer & Stanisław Bacior & Katarzyna Kocur-Bera & Anna Klimach & Agnieszka Trystuła, 2020. "The Impact of Flood Risk on the Activity of the Residential Land Market in a Polish Cultural Heritage Town," Sustainability, MDPI, vol. 12(23), pages 1-18, December.
    4. Mohammad Reza Farzanegan & Mehdi Feizi & Hassan F. Gholipour, 2019. "Drought and Property Prices: Empirical Evidence from Iran," MAGKS Papers on Economics 201916, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Nam Bui & Le Wen & Basil Sharp, 2024. "House Prices and Flood Risk Exposure: An Integration of Hedonic Property Model and Spatial Econometric Analysis," The Journal of Real Estate Finance and Economics, Springer, vol. 69(1), pages 100-131, July.
    6. Nicholas Pinter & James C. Rees, 2021. "Assessing managed flood retreat and community relocation in the Midwest USA," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 107(1), pages 497-518, May.
    7. Rajapaksa, Darshana & Zhu, Min & Lee, Boon & Hoang, Viet-Ngu & Wilson, Clevo & Managi, Shunsuke, 2017. "The impact of flood dynamics on property values," Land Use Policy, Elsevier, vol. 69(C), pages 317-325.
    8. Paul Frijters & Benno Torgler & Darshana Rajapaksa & Clevo Wilson & Shunsuke Managi & Vincent Hoang & Boon Lee, 2016. "Flood Risk Information, Actual Floods and Property Values: A Quasi-Experimental Analysis," The Economic Record, The Economic Society of Australia, vol. 92, pages 52-67, June.
    9. Pilar Lopez-Llompart & G. Kondolf, 2016. "Encroachments in floodways of the Mississippi River and Tributaries Project," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 81(1), pages 513-542, March.
    10. Mohammad Reza Farzanegan & Mehdi Feizi & Hassan F. Gholipour, 2021. "Drought and Property Prices: Empirical Evidence from Provinces of Iran," Economics of Disasters and Climate Change, Springer, vol. 5(2), pages 203-221, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rebecca E. Morss & Julie L. Demuth & Ann Bostrom & Jeffrey K. Lazo & Heather Lazrus, 2015. "Flash Flood Risks and Warning Decisions: A Mental Models Study of Forecasters, Public Officials, and Media Broadcasters in Boulder, Colorado," Risk Analysis, John Wiley & Sons, vol. 35(11), pages 2009-2028, November.
    2. Céline Grislain-Letrémy & Bertrand Villeneuve, 2019. "Natural disasters, land-use, and insurance," The Geneva Papers on Risk and Insurance Theory, Springer;International Association for the Study of Insurance Economics (The Geneva Association), vol. 44(1), pages 54-86, March.
    3. Mutlu, Asli & Roy, Debraj & Filatova, Tatiana, 2023. "Capitalized value of evolving flood risks discount and nature-based solution premiums on property prices," Ecological Economics, Elsevier, vol. 205(C).
    4. Sivadasan, Jagadeesh & Xu, Wenjian, 2021. "Missing women in India: Gender-specific effects of early-life rainfall shocks," World Development, Elsevier, vol. 148(C).
    5. María Isabel Arango & Edier Aristizábal & Federico Gómez, 2021. "Morphometrical analysis of torrential flows-prone catchments in tropical and mountainous terrain of the Colombian Andes by machine learning techniques," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 105(1), pages 983-1012, January.
    6. Francesco Serinaldi & Florian Loecker & Chris G. Kilsby & Hubert Bast, 2018. "Flood propagation and duration in large river basins: a data-driven analysis for reinsurance purposes," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 94(1), pages 71-92, October.
    7. José Armando Cobián Álvarez & Budy P. Resosudarmo, 2019. "The cost of floods in developing countries’ megacities: a hedonic price analysis of the Jakarta housing market, Indonesia," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 21(4), pages 555-577, October.
    8. Lee, Chien-Chiang & Chen, Mei-Ping, 2020. "Do natural disasters and geopolitical risks matter for cross-border country exchange-traded fund returns?," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).
    9. Ibidun Adelekan & Adeniyi Asiyanbi, 2016. "Flood risk perception in flood-affected communities in Lagos, Nigeria," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 80(1), pages 445-469, January.
    10. Weili Duan & Bin He & Daniel Nover & Jingli Fan & Guishan Yang & Wen Chen & Huifang Meng & Chuanming Liu, 2016. "Floods and associated socioeconomic damages in China over the last century," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 82(1), pages 401-413, May.
    11. Tian Liu & Peijun Shi & Jian Fang, 2022. "Spatiotemporal variation in global floods with different affected areas and the contribution of influencing factors to flood-induced mortality (1985–2019)," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 111(3), pages 2601-2625, April.
    12. S. Mosquera-Machado & Sajjad Ahmad, 2007. "Flood hazard assessment of Atrato River in Colombia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 21(3), pages 591-609, March.
    13. Ihle, Rico & Bar-Nahum, Ziv & Nivievskyi, Oleg & Rubin, Ofir D., 2022. "Russia’s invasion of Ukraine increased the synchronisation of global commodity prices," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(04), January.
    14. Helen Boon, 2014. "Disaster resilience in a flood-impacted rural Australian town," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 71(1), pages 683-701, March.
    15. Dey, Asim K. & Hoque, G.M. Toufiqul & Das, Kumer P. & Panovska, Irina, 2022. "Impacts of COVID-19 local spread and Google search trend on the US stock market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 589(C).
    16. Wim Kellens & Ruud Zaalberg & Tijs Neutens & Wouter Vanneuville & Philippe De Maeyer, 2011. "An Analysis of the Public Perception of Flood Risk on the Belgian Coast," Risk Analysis, John Wiley & Sons, vol. 31(7), pages 1055-1068, July.
    17. Wang, Bingbing, 2022. "Housing market volatility under COVID-19: Diverging response of demand in luxury and low-end housing markets," Land Use Policy, Elsevier, vol. 119(C).
    18. Roland Azibo Balgah & Kester Azibo Ngwa & Gertrud Rosa Buchenrieder & Jude Ndzifon Kimengsi, 2023. "Impacts of Floods on Agriculture-Dependent Livelihoods in Sub-Saharan Africa: An Assessment from Multiple Geo-Ecological Zones," Land, MDPI, vol. 12(2), pages 1-18, January.
    19. Sophie Nivoix & Serge Rey, 2017. "La catastrophe de Fukushima en 2011: quelles conséquences financières et boursières ?," Post-Print hal-01560923, HAL.
    20. Andrew Onwuemele, 2018. "Public Perception of Flood Risks and Disaster Preparedness in Lagos Megacity, Nigeria," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 7, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:nathaz:v:71:y:2014:i:3:p:1519-1536. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.