29 September 2011 – When the owners of a two-bedroom waterfront property on Lake Macquarie on the NSW Central Coast were offered $430,000 recently they jumped at it.
It was a good price, far better than the vacant waterfront block nearby that recently sold for $270,000.
Two years ago both properties might have fetched around $550,000.
Is it the souring market? No, say local real estate agents. Non waterfront property is doing just fine, with only a minor correction at worst. What’s at work here is rising sea levels and storm erosion. And growing awareness, or fear, of the consequences.
“The perceptions of what properties could be worth in the future were once like gold, now people are worried that they might not hold their value,” long term agent with Capital One Real Estate, Wayne Ballard says.
According to Renee Wright of Raine and Horne most property is not selling at all.
“A lot of people are not interested,” Wright says.
She points to one that might have sold for $700,000 two or three years ago, now struggling to find a buyer at $400,000.
And another, which dropped in price by $200,000, with no luck, is now off the market.
Wright says a lot of the owners are blaming the local council for its Section 149 certificate that stipulates flood danger. But the warning have been there for 15 years. What has changed say both agents is a growing awareness of the dangers, reinforced by the Queensland floods early this year.
In recent weeks Wyong Shire Council unavoidably added fuel to the fire with wide ranging consultation on the issue and a major report for its coastal management plan, which it needed to prepare to satisfy state government requirements.
According to Greg White, manager environment and natural resources, for the council many of the owners at the meetings were deeply disturbed and say their property values have been slashed by half, with many not selling at all.
Residents’ concerns are completely understandable, says a sympathetic White.
The report, about to be sent to the state government for certification, concludes there are about 150 houses in “immediate” danger of coastal corrosion, which means they could be “gone tomorrow”, White say.
Over the longer term the number could be higher. There is “a whole series of small villages… all spread around the lakes” with perhaps 200 vulnerable properties.
White says: “It could be that nothing may happen for quite some time, but if we get a really big storm, we could lose 20 metres of coastline.”
The reality could be that only one or two houses are lost in a severe weather event, says White, but even so, the council has taken an increasingly hard line approach in the past 18 months and simply refused building approvals for vulnerable properties.
“Where people say they want to knock down the fibro cottage and build a mansion…none of those are being approved.”
It’s a strategy of “planned retreat” similar to that embarked on by Byron Bay Shire Council in far northern NSW.
“We’ve tried to take a more sustainable approach for the long term. We’ve adopted this plan of planned retreat. Where we can adapt, we will. We will put in structures but this is very expensive. It’s not sustainable.”
Recent work, for instance, has included dune stabilisation and drainage work, in one case at a cost of $2 million. The question is, will it last?
At Gosford there are doubts that a $15 million retaining wall will hold back the tide for long, according to some observers.
According to White owners want some remedies.
“The community is calling for the three levels of government to get together with the insurance industry to set up some compensation otherwise they lose their houses and their land.”
But insurers are not buying in, say the agents.