More Flood Outcomes

Some more flood related news, after Goldman Sach’s and ANZ‘s $20 billion estimates and Julia’s A team.

ABEAR has taken a punt at the export hit

THE devastation from recent floods will cost the Australian agricultural sector $500-600 million, while coal exports will take a $2-2.5 billion hit in 2010-11, according to a new report.

‘The Australian Bureau of Agricultural and Resource Economics and Sciences says coal exports could fall by 15 million tonnes between December 2010 and March 2011 as a result of the floods.

The figures are, however, just an initial estimate of the impact of the recent floods in Queensland, NSW and Victoria.

The impact of the floods on fruit and vegetables, cotton, grain sorghum and winter crops has been significant, according to the report out today.

But the loss of livestock relative to the size of the national herd and flock has not been as great so far, with the main impact associated with disruptions to transport and other infrastructure support.

For some reason the PM thinks it is a good idea to make the private sector a little bit poorer in the aftermath of a natural disaster, because it obviously hasn’t suffered enough.

Prime Minister Julia Gillard has signalled the federal government may impose a one-off levy to help pay for devastating flood damage, while also flagging spending cuts.

Ms Gillard also warned of rising food prices as a result of the extensive flood damage.

”There will be spending cutbacks and there may also be a levy,” Ms Gillard told the 7.30 Report last night, while indicating there would also be an impact on the GDP

Banks are collapsing contracts of sale in flood effect areas, many will be heading for court.

The future of up to 600 off-the-plan apartment sales worth $577 million in inner Brisbane could be contested — some in the courts — in the wake of the devastating floods.

The issues facing new apartment sales could mirror those of the global financial crisis, according to Damian Hackett, chief executive of Brisbane-based Place Estate Agents.

During the 2008 financial crisis values fell rapidly and banks and financiers would lend only on the lower value at settlement, rather than on the contracted purchase price.

“There are still properties that have not settled after the GFC,” Mr Hackett said yesterday.

He said there were unconditional sales contracts on about 596 inner Brisbane properties worth $577m.

The Commonwealth Bank, Westpac and the ANZ said they were working on a case-by-case basis and would support customers affected by the floods.

However, if Brisbane property values drop more generally, banks are expected to lend on the potentially lower value of the property at settlement.

We have also heard unconfirmed rumours that some banks have cancelled finance for many more properties in flooded or near flooded areas no matter how far they are through the contract, even those that have gone unconditional. We are yet to verify this. But if true, then you could snap up a bargain in a flooded area, you’ll need a big deposit… 100%.

The insurance guild has “concluded” that it doesn’t want to pay out people in Brisbane or Ipswich

However, the Insurance Council has concluded that damage in Brisbane and Ipswich was a result of flooding, something that is not automatically covered by most insurers.

Given that it seems the insurers can decide whether they think you are covered or not, depending on their definition of what is and what isn’t flooding, it makes you wonder why Westpac wants everyone to have it.

Westpac could force mortgage customers to buy flood insurance in the wake of the crisis that has engulfed the eastern states and destroyed thousands of Queensland homes.

Bank management has revealed it is considering making flood insurance compulsory for home loan customers in a move that would mitigate the group’s risk in the event of another flood crisis.

“It’s not the practice in Australia at the moment but it is something we are looking at,” said Westpac human resources chief Peter Hanlon, speaking at the Senate inquiry into banking competition.

The revelation coincided with the release of research estimating that mortgages totalling $5.1 billion in Queensland were “at risk” as a consequence of the floods.

And finally the ABS data is also going to be flood affected.

Australia’s official statistician said floods in Queensland had delayed the gathering of data in the region and would result in under-reporting in some surveys.

The Australian Bureau of Statistics said it had suspended the collection of data in places declared official disaster areas and some data releases could be delayed by as long as two weeks. The situation would be assessed twice weekly to determine whether normal data collection could resume.

“The suspension of activity means that there is likely to be a significant level of under-reporting in ABS surveys that are in the field during this time,” the ABS said in a statement

So it won’t be long before we see the “data was under-reported” excuse in action.



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Comments

  1. You saved the best for last… best we not publish the truth as QLD prices go under.

    Oh… too early.

    🙁

    Sorry!