Lismore land values halve post-2022 floods – PointData

The resilience of Australia’s property market is tested as Lismore struggles to recover from the 2022 floods, with land values halving and creating challenges in saleability and financial stability, according to a new report from PointData.

PointData’s climate risk modelling uncovered the long-term devaluation of properties in Lismore, employing AI and machine learning to differentiate between immediate and extended impacts on property values.

Financial sector under threat

George Giannakodakis (pictured above), founder of PointData, discussed the compounded devastation caused by climate events and market fluctuations, particularly highlighting the drastic value drop in Lismore’s flood-affected areas and the subsequent risks to the financial sector.

Despite recovery initiatives like the NSW government’s Lismore Flood Recovery Planning Package, property values in North and South Lismore remain significantly reduced.

“The flow-on impact is that entire postcodes or suburbs are often then classified as ‘no go’ zones by banks and insurers, as the risk of further flooding, or climate-related events remains,” Giannakodakis said.

PointData’s innovations

In a media release, PointData said its granular technology now identifies locations within suburbs less vulnerable to flood risk, separating them from higher-risk areas.

The company has developed two solutions accessible to both consumers and financial institutions:

1. An assessment of building risk at the property level for all residential properties, which incorporates mitigation strategies through planning overlays and building codes for new constructions and developments. Using global digital elevation data, LIDAR, and government records, PointData can precisely calculate a property's footprint and structure in areas affected by climate events.
2. A climate-adjusted LVR ratio tool for banks, designed to accurately communicate the prospective risks at the property level to the financial sector.

“As an industry, we need to find solutions that spread the risk of climate-related events to mitigate the potential for ‘climate ghettos,’” Giannakodakis said. “Innovation and technology should be at the centre of the solution to enable protections for homeowners, while mitigating the risk for banks and insurers.”

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