Houses and Property and floods

Why were houses built where it floods?

From the early 1800s many towns were established on floodplains next to river systems.  Our early settlers were not familiar with the extreme variability of flow in Victorian rivers and streams.  Many settlements, which later grew into substantial communities, were located in areas subject to flooding. Land was settled adjacent to rivers and streams and along coastlines principally for benefits such as water supply, transportation, waste disposal, river crossings and productive soils.  Today we are now left with legacy flooding problems that require flood studies and floodplain management plans to understand the nature of flooding and to determine how to deal with the risks.  It is only in the last couple of decades that this has been properly appreciated as a result of experience of past major floods, improved flood information capture and computer technology. This flood information has provided knowledge to better understand floods.

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What will flood mapping do to my property value?

Research in Australia* indicates that such policies do not have a noticeable effect on property values, particularly in high value markets such as Melbourne where other factors are more dominant.

If your property has been identified as having a flood risk, the real flood risks on your property have not changed, it's only that flood information is now more transparent through planning scheme flood overlays and planning certificates contained in Section 32 (Vendor's) statements when selling a property (required under the Sale of Land Act 1962).  A prospective purchaser of your property could have previously discovered this risk if they had made enquiries themselves.

* Dr Stephen Yeo, “Are Residential Property Values Adversely Affected by Disclosure of Flood Risk?” Proceedings of the 44th Annual Floodplain Management Authorities Conference, Coffs Harbour May 2004.

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My property was never identified as ‘flood prone’ before.  What has changed?

Your land may always have been flood prone.  What has changed is our understanding of flooding.  Your land has been identified as flood prone so that you know that you need to be prepared for floods and reduce your losses when a flood occurs.  It also means that if you want to redevelop or build on your land you will be able to build in a way that is appropriate to the flood risk.  This will ensure that your investment is better protected from future damage.  It also ensures that buildings do not make flooding worse for neighbours.

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Do I have to change my property if it is flood prone?

You can choose to leave your property as it currently is but there are simple things you can do to better protect it from floods.

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What if I want to carry out building works on my property?

When you make major modifications to your building you will have to make the property comply with any requirements for building or development which apply to flood prone land in your local government area.

The purpose of planning and building controls is to protect your investment from future flood damages which you probably won’t be able to insure against and to ensure that building and development does not make flooding worse on neighbouring land.

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What if I want to sell my property?

When you sell your property you are required under the Sale of Land Act 1962 to prepare a Section 32 statement (or known as a Vendor's statement) that includes any information affecting the property.  This includes council planning scheme information that will inform the purchaser if there are any zone and overlay controls applying to the property which may restrict the land-use and development of the land.

A Planning Certificate should be obtained from your council or online from LANDATA® which provides property titles and certificates.  This provides any amendments that have been placed on exhibition and well as current information within the council planning scheme.

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Will I be able to get house and contents insurance if my property is identified as flood prone?

In contrast to the USA and many European countries, flood insurance is generally not available for residential property in Australia.  Following the disastrous floods in Coffs Harbour in November 1996 and in Wollongong in August 1998, some insurance companies are now offering very limited flood cover.  The most likely situation is that your insurer does not offer you flood cover.  If limited flood cover is offered, the flood classification of your property is unlikely to alter the availability of cover because the flood risk has always existed, it simply was not identified.  Obviously insurance policies and conditions may change over time or between insurance companies, and you should confirm the specific details of your situation with your insurer.  More information about residential flood insurance is available from the Insurance Council of Australia website.

More information on flood insurances can be found at Flood insurance on this website.

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Will I be able to get a home loan if my land is flood prone?

Most banks and lending institutions do not account for flood risks when assessing loan applications unless there is a very significant risk of flooding at your property.  Nevertheless, property owners who are concerned about their ability to obtain a loan should clarify the situation with their own lending authority.

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Page Last Updated: Friday 16 July, 2010