RateCity.com.au
  1. Home
  2. Home Loans
  3. News
  4. Natural disasters create mortgage stress for Queensland

Natural disasters create mortgage stress for Queensland

Laine Gordon avatar
Laine Gordon
- 2 min read
Natural disasters create mortgage stress for Queensland

April 15, 2011

Three months down the track and the knock-on effects of Queensland’s recent cyclone and flood devastation is being felt by householders and banks alike.

Loan Market chief operating officer Dean Rushton has said the floods are expected to have a negative impact on banks, borrowers and house prices, as household budgets strain and reduce banks’ willingness to lend.

House prices across the Sunshine State are predicted to fall as, aside from the obvious problems facing those whose homes were damaged or destroyed, the areas most affected face devaluation as potential buyers become wary of moving into flood-prone areas.

Mortgage stress also is hitting home in these towns and suburbs as people struggle to make their repayments. And while it’s unlikely many will be sympathetic to their plight, banks too are feeling the pinch as they fail to recoup the full value of foreclosed properties that have been badly damaged. Mortgage insurance, which is supposed to cover the banks in the case of mortgage defaults, doesn’t cover flood damage.

Queensland Premier Anna Bligh recently said 28,000 homes would need complete rebuilding following the floods, while many would be uninhabitable for weeks, months or even years.

Experts predict difficulties in paying mortgages at the level that might be experienced in Queensland are significant enough to affect the entire Australian mortgage market and its global position. The median house price in Brisbane fell 1 percent in November, seasonally adjusted, to $432,900, according to RP Data.

“For the next six years or so, a flood report is going to be the chestnut for anyone interested in buying property in Queensland or other states, as well,” Rushton said.

Related mortgage links

Disclaimer

This article is over two years old, last updated on April 15, 2011. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

Compare home loans in Australia

Product database updated 17 Apr, 2024

Share this page

LinkedInTwitterFacebookMail

Get updates on the latest financial news and products

By continuing, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.

Related home loans articles

Promoted home loans

Sucasa

Ultra Low Rate (Variable) - <98% LVR - No LMI (New Purchases)

Real Time Rating™

  • Owner Occupied

  • Variable

  • 2% min deposit

  • P&I

2024 Award Winner
Special
No LMI for up to 95% LVR Owner Occupier Purchases in Metro Capital Cities!

Interest rate p.a.

6.30%

Comparison rate* p.a.

6.63%

More detailsclick for more details

Australian Credit Licence 443249

Product info
Unloan (a division of CBA)

Variable Rate Home Loan LVR < 80%

Real Time Rating™

  • Owner Occupied

  • Variable

  • 20% min deposit

  • P&I

2024 Award Winner
Special
Receive an extra 0.01% p.a. discount every year, up to a maximum discount of 0.30% p.a.

Interest rate p.a.

5.99%

Comparison rate* p.a.

5.90%

More detailsclick for more details

Australian Credit Licence 234945

Product info
IMB Limited

Budget Home Loan

Real Time Rating™

  • Owner Occupied

  • Variable

  • 20% min deposit

  • P&I

2024 Award Winner
Cashback
Up to $2,000 cashback for loans $500,000 and above with maximum LVR of 80%.

Interest rate p.a.

6.14%

Comparison rate* p.a.

6.17%

More detailsclick for more details

Australian Credit Licence 237391

Product info
Mortgage House

Executive Saver Home Loan

Real Time Rating™

  • Owner Occupied

  • Variable

  • 50% min deposit

  • P&I

Interest rate p.a.

5.99%

Comparison rate* p.a.

6.04%

More detailsclick for more details

Australian Credit Licence 393283

Product info
product data updated on

Product data updated on 17 Apr 2024