Do natural disasters impact property investment?

By Cameron Micallef

March 18 2020
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Despite months of bushfires dominating the news cycle, investors are being advised not to avoid an area due to the threat of future disasters.

natural disasters impact property investment

According to Propertyology head of research Simon Pressley, while some investors might be put off by disasters, adding it to the “things to avoid list” is an impossible expectation for any investor to place on themselves.

“The odds of your property being significantly damaged or destroyed by a kitchen fire or major water leak are probably higher than totally avoiding natural disasters,” Mr Pressley said.

Mr Pressley said every location around the nation had the potential for natural disasters, because Mother Nature does not discriminate, meaning investors should look at the fundamentals over disaster areas.

However, while locations can be impacted by disasters, smart investors never included “natural disasters” on their list of property markets to avoid.

“It is truly heartbreaking to see people lose their homes during the recent bushfires. It emphasises the importance of all property owners having adequate insurance,” he said.

Mr Pressley said that every location in Australia has probably been directly impacted by a natural disaster on at least one occasion, yet our nation is not littered with abandoned communities or ghost towns.

“Not only is Australia a wealthy nation, we are also a country of incredibly giving people who are prepared to financially and physically help those impacted by natural disasters,” Mr Pressley said.

Capital cities and regional locations had all been impacted by major weather events at one point in time. Communities have been rebuilt and property prices had continued to increase over the long term.

“Successful property investment has always been about selecting locations based on objective analysis of property market fundamentals, not on Mother Nature,” Mr Pressley concluded.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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