Real estate prices in Brisbane are forecast to plunge and rental rates to rise as market demand for accommodation jumps during the wake of the disaster.

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An estimated 1,000 unfinished units located on the Brisbane River were ruined by the flood waters, racking up an estimated $800million worth of damages. The projects on the river could prove to be a loss for some major property developers in the country like Mirvac and Australand.

Home prices tend to be discounted by as much 50 percent if they are severely affected by a natural disaster. Moreover, the disaster will affect those still paying mortgage on a house they are renting out. About a quarter of houses nearby the Brisbane River are said to be hit by flood waters with suburbs located upstream like Fairfield, Graceville and West End affected the most.

It would take intervention from the government to boost infrastructure around the river for property prices to come back to pre-flood prices following the case of the Brisbane floods in 1974 when prices climbed back up after the Wivenhoe Dam was developed as a buffer to future flooding.

Real estate price monitor RP Data reported that in the Brisbane suburb of Chelmer, average median house price increased from $200,000 in 1990 to $900,000 in 2010. Prices are expected to pummel after the flood disaster as 16,205 properties have been advertised for sale in Brisbane in the past month.

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