Finger Pointing

I was listening to some people talk about the processes to follow for those houses with flood damage.  Carpets need to be replaced, bricks that were under the waterline need to be replaced, but if the wooden frames have been damaged then the whole house may as well come down.  This is a tragedy for those who don’t have flood insurance, they commented, because of building/buying in an area listed as a flood zone.  They now have nothing but a life riddled with debt.

Who do I blame for this?  I blame the banks.  Why would a bank or any other lending institute lend money to purchase a house in an area prone to flooding when it is known that the borrower cannot take out insurance against flooding?

My finger is pointed at them.  Where does yours point?

48 comments on “Finger Pointing

  1. Greedy councils and State Governments for;

    a) Allowing developments to go ahead in those areas.

    b) Restricting the release of land in other more appropriate areas to build.

    c) Not being tough & proactive and building more dams – to help with the water supply issue in the dry – and provide a larger buffer in the wet.

    The owners themselves are responsible for being insouciant about their insurance. I just changed my insurer as when my policy came up for renewal I noticed they had removed flood cover. Suncorp cover flood, period.

    Although I hear where you are coming from, I don’t agree with blaming the banks. People wanted to borrow money; they leant them it.

    The banks didn’t MAKE them buy in those areas. Did they ask the relevant questions about if / when those areas had flooded before? Did they exercise common sense in buying / building homes in low lying areas that had flooded severely only 35 years ago?

    If the banks refused to lend to people, they would then be the bad guys for not lending. They can’t win with this kind of thinking.

    These are adults, not children. Where is the concept of personal responsibility in your argument?

  2. Hi Damo. True, they should probably not have bought there but coming from a finance background I am aware that some loans can be classed as ‘unconscionable’. That is, the loan should not have gone ahead under the circumstances (if undue risk is placed upon the borrower).

    But banks take their chances and so do borrowers. There is a risk involved with any loan and both parties should do what is necessary to mitigate any risks.

    I like point A in your response about the development going ahead in the first place. Talk about being unconscionable!

  3. Damo a problem I found when I was on Council is that once a DA has been passed then purchasers often assume that due to the fact that it has been passed then it is safe to build there. Given that many people who buy in new subdivisions are young people, they often don’t have the experience to know what they should have done until it’s too late.

    As one possible solution my preference is that state governments took the initiative to help protect purchasers. That is, by law a Notification stating any potential risks. As well as being in the 1:20 year flood risk area, notifications could include landslip areas and former chemical and other land use.

  4. Migs, most of those areas were developed long before the ’74 floods, I lived in Rocklea in the 60’s as a kid, my step-father air conditioned Indooroopilly shopping centre in the early 1970’s the suburbs around the city area were first developed in the early 1900’s, yes there are areas in brisbane that are flood plain and have been developed and did flood not because of the river but because of the rain we had, Ipswich I would have to check my facts before commenting, but also I think well all had a false sense of security that Wivenhoe would save us next time, but the bit everyone has forgotten about was the unprecedented event that developed in Toowoomba, that had never ever happened before, and that spillage entered the Brisbane River catchment below Wivenhoe Dam and was uncontrollable. Atop the list for the inquiry is just the event that happened in Toowoomba, could it happen again and how if it ever did how can we mitigate it, I think a large part of the problem is we want to control the weather to suit our comfort, people like to live on rivers, I don’t live where I live by accident on top of a hill well out of the way, I understand this city and how it breaths. And if we go down this path of finger pointing where does it stop the cyclone that has just past us heading to towards Norfolk Island and New Zealand could just as easily have swung this way and hit Brisbane again less than a week later it has happened before, so do we stop living in Queensland because it floods and we get cyclones, maybe we should only live in the centre of Australia safe and not develop anywhere on the east coast because it is all at risk at sometime.

  5. damo, I think it’s more likely that the developer is the greedy one. If a council knocks back a development proposal, they’ll often go over council’s head to a compliant state government and if the state government won’t acquiese, to the courts to get the decision reversed.

    Min, I like the idea that purchasers must be advised of potential risks like flooding etc. It could easily be included in the contract of sale and I’d even be inclined to make it mandatory to include that information on for sale signs.

    It might make developers a little less gung ho about developing unsuitable land.

  6. Maybe it’s just me, Augustus, but I wouldn’t buy a place where I couldn’t get insurance. Lifestyle preference or not, I’m not the sort of person that takes risks.

    I’m wondering if house buyers knew when they bought that flood insurance wasn’t available.

    However, I still argue that banks need to be more conscionable. Or perhaps it could become law that funding cannot be provided unless there is full insurance over the property. You cannot borrow money to buy a new car unless you can provide evidence of comprehensive insurance.

  7. Migs, I’ve seen quite a number of young people front up to Council complaining that they couldn’t get the insurance that they expected would be par for the course, that they didn’t know and why didn’t Council tell them. An option at least in Victoria is to ask to look at the DA Approval for any Conditions that might apply to the site prior to purchase. But who is going to tell anyone that this is what they should do? The real estate agent?

    As for the banks, they would need to develop a soul before they would consider their customers.

  8. Migs, there are definately questions that require asking and demand answers, when Cambell Newman was elected Mayor he expressed concerns about development on known flood plains, there is also the other issue and that was mass migration to SEQ, everyone wants to live here, and yes in their desire to live the sub-tropical lifestyle they have forgotten the practicalities, and where do we put them all, definately there needs to be disclosure “THIS LAND IS A FLOOD PLAIN BUY AT YOUR OWN RISK” that should be mandatory and a lot of these places are investor properties as well, with the world on a get rich quick scheme, I just blame simple greed. I was raised in Brisbane and there are areas I just won’t live for that reason.

  9. I forgot to mention Suncorp has said that anyone with a policy with them is covered for flood no fine print, anyone who has loans personal or business, mortgages through there banking arm will automatically have there loans put on hold.

  10. Damo, I thought that I would have go at tackling b)Restricting the release of land in other more appropriate areas to build.

    A difficulty is that there is just about no land left within reasonable commuting distance of most major cities hence a major reason why so much pressure is put on by the developers.

    A solution that comes to mind is decentralisation. However the developers would mostly fight tooth and nail against this because of course it costs far more to build away from major cities.

  11. Migs, I guess the greatest risk to lending institutions providing housing finance is mortgagor default, not natural disasters or accidents as you have with vehicles.

    Min, I’m surprised that people would think the council chamber is the right place to complain about housing insurance. I’m just curious as to what they think a council’s function is.

    In fact, they’d be better off asking their lending institution, as a lot of them also provide insurance packages, including mortgage insurance. I don’t know about mortgage brokers, but I imagine they could be a source of information and advice.

    However, the fact remains that it’s up to the purchaser to organise their own housing insurance.

    I haven’t found banks to be soulless, particularly where housing finance is concerned, but People should do some research before buying a property and no matter what, they should use the old tried-and-true rules of thumb when buying a house.

    Have at the barest minimum a 10% deposit, don’t borrow 100% of the price, don’t commit more than 25% of your nett income to mortgage payments, go to your lender immediately your financial situation changes and ask for their help.

    A lot of people are ashamed to admit they’ve fallen on hard times, but they have to remember that banks aren’t mind readers and early intervention and consultation can make the difference between keeping your home or being slung out on the street after defaulting.

    It’s much easier and makes more financial sense to lending institutions to come to an arrangement with their customer than to have to seize the property and sell it! That is definitely the last resort.

    Min, decentralising is a very good idea imo, but as you say it’s not a popular choice with developers nor with punters, who don’t like to be too far from the smoke.

    I like the idea of cluster development where residents can develop a real community feeling and where commercial, academic, leisure and cultural venues are within easy reach. Sigh!

  12. Jane, what I meant was that people would front up to the front desk at the Council offices and complain “Why weren’t we told” when they discovered that their newly purchased property turned out to be just a wee smidgey bit different than what the real estate agent said it was.

    But yes people would often come to Council meetings and Riding meetings often as a delegation of concerned ratepayers demanding that Council fix the problems that they purchased.

    The number of porkies very frequently told by real estate agents included:

    There will be no problems if you want to subdivide ~ translation: that is if you’re prepared to wait 7 years and pay $50,000 to take Council to the Administrative Appeals Tribunal

    No, landslip has never been a problem here, that lap pool you’ve always dreamed of would look great/add value to your property. And of course the application had to be subsequently knocked back by Council.

    And absolutely not a scrap that Council could do about it as the real estate agent was only expressing his personal opinion compared with the factual information which was available via the Town Planning Department to all potential purchasers if they knew that it was there. And yes Lilydale Shire did put big notifications in local newspapers to advise potential purchasers of this in the hope that people would not only read it but follow through with the advice.

  13. Addendum: often purchasers would only find out that the property they bought wasn’t they thought it was when they went to get contents insurance.

    One benefit of the flood is that people no matter where, are now far more aware of potential problems and will take the time to double check whatever a RE agent tells them.

    Having dealt with a number of RE agents in the past both via being Riding Chairman and personally I consider RE agents the scum of the earth. With due apologies to any good’uns that might be on board.

  14. You know there is a downside to the idea that we should now consider building away from the flood plains. It naturally follows therefore that you would want more building in hilly regions. Now, where I live the environmental activists fought tooth and nail for decades to not allow Council to approve developments up the hills around where I live. Well, to as small an extent as possible. This was to prevent the eventual mudslides(as was so graphically demonstarted in Brazil this last week), when the topsoil-retaining trees were taken away for the developments to occur. We now have development to about half-way up the hills with a beautiful green canopy to look at as we drive around and no big mudslides occurring when it rains heavily.
    Of course, I am a hypocrite because I live on the top of a hill. 🙂
    However, it is a Bush block with a National Park across the road and a zoning on the whole hilltop called ‘Environmental Living’ which severely restricts the occupants of the acreage blocks from subdividing or clearing away remnant Native Tropical Rainforest.

  15. Hi again folks.

    @ Min – “A difficulty is that there is just about no land left within reasonable commuting distance of most major cities hence a major reason why so much pressure is put on by the developers.”

    Just not true I’m afraid. State Governments began locking up massive tracts of suburban land as ‘green belts’ in all states from 2000. I read about it then and agreed with the author’s predication that it would lead to an epic housing boom, which, funnily enough, is exactly what eventuated – in turn filling State Government tills with excessive Stamp Duties and local councils with a massive windfall in Rates from over-priced property.

    There’s plenty of land left which can be developed and plenty more which should be re-developed with a much higher density. If you take a look around most of Australia’s capital cities, there is widespread waste and inefficient use of land.

    @ Jane – I agree; developers are greedy but I disagree that its ‘more likely’. Many developments dont go ahead without the provision of a nice, fat brown paper bag full of cash or a couple BMW’s sitting in Councillor’s garages…

    Also, a lot of the comments above keep referring to people not being able to insure against flood. I noted in the very first comment that this is in fact, bollocks.

    I’m not saying I disagree with the unconscionable lending. It goes on constantly – but, my point was, people TOOK THE LOANS. No one forced them.

    In 2003 myself & my Wife were told we could borrow $1,000,000. No problem. WTF? Did we borrow $1,000,000? Of course we didn’t. Why? Because we couldn’t bloody afford it, thats why. But, plenty of people did -and then borrowed more to buy plasma tv’s, fast cars and boats. ‘Equity Mate’…

    I had no sympathy for the ‘poor battling investors’ who lost out when Storm fell over. Am I being cold hearted? No – these people were GREEDY and STUPID. They were told they could borrow millions in order to make millions. None of them questioned it because they were blinded by greed.

    There are no excuses to people not having been told. I’ve only been in Australia since 2000 and in Queensland since 2004 and I know well enough about the 1974 floods AND the catastrophic bushfires in Victoria. Its simple – unless you’re prepared to run the risk of being flooded or burnt out – DONT BUY IN THOSE AREAS ffs…

    There’s no insurance against ignorance I’m afraid.

    I know we like to give people the benefit of the doubt but honestly, many people cannot be helped – they are their own worst enemies and we shouldn’t be blaming everyone else for their misfortune. Australia is enough of a Nanny State already.

  16. Hi Damo

    I think developers are the most responsible for the problems we are having both construction, land prices and flood areas. Land in flood prone areas is purchased by developers who then pressure councils to permit development on what should be left as a natural flood plain. Pelican Waters was a paper bark swamp. Roads were flooded and closed during the latest downpour. That is what happens when you build on flood plains and also cover them with tar and cement.

    If they do not get the development approved by local council, their first type of attack is to accuse the local council of being anti development and then all the usual accusations of lost jobs, lost opportunities to other councils etc etc get thrown about. At election new couincillors are elected under campaigns by developers. So it is not only crooked councillors who do underhanded deals but also crooked developers. I suggest you read up on the Dean Brothers.

    Can you give me the location of these massive tracts of land that have been locked away as green belts in Brisbane area ?.

    Stockland have over 500,000 blocks of land which can be released in the sunshine coast and they are doing it at a snails pace to keep prices high. Nothing at all to do with government but everything to do with sucking as much as they can from the poor buyers.

    Stamp duty has been all but abolished for first home owners yet prices did not go down. Showing that the market simply absorbs everything governments do to make things easier. Yet the sale is still just as expensive if not more so. The government gives a boost to the first home owners grant and prices are put up by the same amount by the real estate.

    I have lived on the sunshine coast for the last 10 years and witnessed the continual removal of all bushland at an horrific pace.

    If you think the remaining tracts of bushland reserved for our native flora and fauna, I suggest you view satellite maps of the areas and see the miniscule percentage devoted to preservation over the massive percentage developed or being opened up to current and future development.

    The Wivenhoe dam was 90cm from increasing the flood in Brisbane by further 1m as it was 90cm from the wall fuses breaking a section of the dam wall to avoid total loss of control of the dam and the integrity of its walls. Dams do not stop floods. 90cm is a bit close for my liking.

    Australia is one of the flattest countries on earth with very few mountain ranges and swathes of open plains. You cannot dam open plains, that is why so much of our country floods. Most other countries have mountain ranges with deep valleys. We have so few of these that most suitable sites already have a dam.

    Australia already has 500 large man made dams. Countless thousands of small man made dams. Along with natures natural dams.

  17. @ Shane – I agree with most of what you’ve said. Did you read my first comment? right at the top. And the one agreeing with Jane over developers. I didn’t disagree on the developers being to blame and Stockland obviously need a rocket.

    Re: Stamp Duty – not all buyers are first-time buyers and for most of us – myself included currently trying to buy a home – despite the GST’s arrival supposedly doing away with it – nothing has changed. We’re looking at the immense privilege of handing over about $7,500. I agree with your wholeheartedly on the FHOG etc; it did nothing but speed up an impending boom.

    I DO disagree with you on the dam issue however, There have been several major dam projects in QLD cancelled over the years due to minority local pressure groups and weak-kneed authorities. This is CRITICAL INFRASTRUCTURE and shouldn’t be subject to political nonsense or Peter Garrett…

    By the way, the Great Dividing Range is the third longest in the world and stretches for 3,500km. And at 2.9/km2, Australia is also one of the most sparsely populated countries on the planet. Macau has 18,534/km2 ; )

    Perhaps the solution to protecting bushland reserves etc is increased high density development?

  18. “Shane, I concur wholeheartedly with all that you have written.”

    As do I. Well said Shane.

    “In 2003 myself & my Wife were told we could borrow $1,000,000. No problem. WTF? Did we borrow $1,000,000? Of course we didn’t. Why? Because we couldn’t bloody afford it, thats why.”

    Good for you Damo. I know plenty who did fall for the offers. One family went broke, lost everything. Another is getting close to that because the wife is not handling the pressure and has gone on buying sprees to ease her anxiety…but in actual fact is just adding to the burden. It’s sad to observe.

    Migs, good post. As for ‘unconscionable’ loans…plenty of those helped bring about the GFC. Fortunately, there seems to be less of that in Australia than America & the UK. But then again, can we really know when our house prices haven’t dived like theirs did. Yet.

    But when it comes to the floods…I primarily blame greedy developers & their allies (bought?) in the councils & governments.

    And people need to check the flood maps & such that can be found at council offices before they buy. We did. The ’74 flood just reached the bush across the road…but our house is situated much higher than that area…so we took the risk. Taking into account the dams built in our area since then.

    Didn’t mean we didn’t have the odd pang of anxiety tho when those dreadful storms hit. Sometimes ya just make the wrong decision. Or nature hits harder than previously. It’s a chaotic world. And there will always be casualties. Sometimes we need more empathy & less fingerpointing.

    Tho less so when it’s about GREED.

    N’

  19. The great dividing range may be the third longest in the world but our mountains are only hill tops to most other countries. We are considered the oldest continent on earth and our ranges have eroded to be stumps in comparison to other ranges.

    Australia may be sparsely populated however over 90% of our population is located along the coast. Simply dividing the population by the land mass is a simplistic argument in relation to population.

    I for one do not wish to live as dense as Macau. This link also shows the other differences we have with Macau

    http://en.wikipedia.org/wiki/Geography_of_Macau

    Increased high density is being rolled out, however the land masses owned by the private companies such as Stockland have already been given DA approval years and years ago. they have just been sitting on the land.

    The main problem regarding bushland is that we are building on the bushiest and most highly flora and fauna areas of our continent. The majority of our continent is extremely dry so most of our flora and fauna are located at rivers or on the coastline. Where do humans build their towns and cities. Along rivers and the coastline. If we do not set aside bushland now we will have none left. Cities in china are that polluted you cannot go outside without a msak, so high density has its own problems.

    Most business these days is done via email, or live conferencing. We could solve a lot of our problems by decentralising our industries. But for some reason they all want to be in one spot. Why companies head quarters need to be in cities I do not know.

  20. And I found it troubling that fertile areas that used to provide so many yummy, nutritious veges in this part of Sth-East QLD…incl. Rochedale, that were not flooded…have now been developed.

    Dumb move.

    N’

  21. To add a little Shane, the Grampians in Victoria are part of the Great Dividing Range and is a National Park as are a good number of the highest points and nearby valleys of the GDR likewise national parks. I don’t think that anyone would like to see our national parks gone.

    And agreed re our remnant bushland..which are one of the few remaining havens for our endangered species. Unfortunately (for them) our flora and fauna have very specific habitat needs.

    There are often write-ups in local newspapers about how a development application for eg the remnant marshland in Byron Bay where the land is worth a squillion. JUST the Wallum froglet the newspaper reads…it’s only a frog. Hells bells without this remnant then wave goodbye to an entire subspecies.

  22. It is a balancing act between those wishing to develop and those wishing to maintian their habitat and way of life.

    What I do find amusing is the city dwellers who decide on a tree change and move to the country or a more bushy area for a quiter less hectic life and then chop down all the trees because of the native animals they are afraid of, or they smell or they want just lawn. I have one just up the hill who is chopping all the trees on his land down as he wants to have horses. Why didn’t he simply buy a ready made stud?

  23. Min @8.58pm, I understand what you were saying, I was just surprised that people thought council’s influence extended to insurance and other real estate matters not connected with zoning etc.

    Real Estate agents of course rely on people being ignorant of how the game works, that’s why I believe they should do some research before leaping into buying real estate. There are so many traps for young players, it’s scary.

    Perhaps this could be a new and lucrative career; seminars for people about to enter the real estate market. Your knowledge from your time as a councilor would be invaluable in educating inexperienced people as to the role of councils in real estate.

    I’m sure there’s a wealth of experience on buying and selling houses, arranging finance and insurance on this very blog.

    Better still, we could have a website, cutting out the leg work, although travelling around the country wouldn’t be too hard to take.

    FS, what you say reinforces the idea that we’re really going to have to look at the way we manage development in this country. We can’t just develop willy-nilly and we’ve got to stop whinging about councils which very sensibly try to stop unruly developments.

    damo @1.21pm, I agree with what you’re saying. In the final analysis, we’re all responsible for the decisions we make. These days it’s too easy for people to shift the blame for their own mistakes and lack of preparation.

    Buying a house is a very serious business, and you have
    to educate yourself about the realities of the real estate market.

    eg, just because a lending institution wants to throw money at you (although I’ve never had that experience), doesn’t mean you have to accept.

    However, you must exercise some self control; if you can’t afford to repay the loan, don’t take it, no matter what! But don’t blame the lending institution if you’re silly enough to get sucked in.

    Ditto insurance. You have to ask what the policy covers. I think it’s called being grown up.

    Shane, excellent comment. I heartily agree with what you say.

    Nas’ @4.14pm, this has happened increasingly everywhere in this country and no doubt others.

  24. Jane, you are obviously into practical application. It gets to be a matter of flow of information from one to the other.

    What Council knows, the developers and the real estate agents know, but the potential purchaser may or may not. Such as the process by which Council arrived or was forced to arrive at the decision to pass the DA. And it is of course highly unlikely that developers would alert RE agents to anything that might impact on a sale.

    Then the banks may or may not know anything at all except the purchasers borrowing capacity or they may have a little information based on Council valuations not the DA.

    And so around and around it goes.

  25. Don’t get me started on real estate agents or property developers. My dealings with either have not been very calming.

    Case 1: Put my signature on a house and land package only to find out later that council hadn’t approved the plan. Council wanted a few changes and the developer subsequently wanted to slug an extra $34K to the cost. Also tried to slug me $2K for tree removal! Spoke to the vendor and he advised me that the trees had been removed by him and at his cost. With the support of the REI I was able to walk out of the contract. I was still out of pocket a few grand, but it was money spent learning a valuable lesson.

    Case 2: I live in a free-standing house in a courtyard which has a managing agent. I asked the real estate agent if there were any fees and he replied there were, but I wouldn’t have to pay them. Yeah right! Those fees I didn’t have to pay cost me $50 a week. Bloody liar.

  26. Problem is Min that as they have in the past the developers will take whoever is blocking development in an area to court and will more than likely win.

    The reason many prone to flooding areas have been built on, and they are clearly marked as such, is that the developers have won the right over both State and Local councils to build there. The people who buy there know they are buying in a flood prone area as the areas are marked and most can’t get flood insurance because of the area they live in. It doesn’t help that they usually buy relatively cheaply during the height of a drought and can’t envisage being flooded out.

    Then what do you do about Brisbane itself, move it, for much of it is built in an area subject to frequent flooding and it got off relatively lightly this time, partly due to the Wivenhoe dam?

  27. I heard on the radio that a Liberal Minister – I’m sorry, but I can’t recall who (partly due to his obscurity) – has called for flood insurance to be compulsory.

    He is ignorant to the fact that most insurance companies don’t provide flood cover in known flood zones, and that most Australians wouldn’t need cover any way.

  28. This has offensive language, but the level of verbal offence is moderate compared to the behaviour of retailers ripping off flood victims.

  29. Mobius, the proviso (at least in my experience) is that it mostly depends on the will of the state government. Pro-development Liberal governments being far more likely to back applications.

    Also I don’t like the chances of a developer receiving much support from anywhere if they attempt to override a decision of the QRA. Although it’s not yet clear whether the QRA will be the final decision makers I suspect that they will be, that they will be the final court of appeal.

  30. “I heard on the radio that a Liberal Minister – I’m sorry, but I can’t recall who (partly due to his obscurity) – has called for flood insurance to be compulsory.”

    Migs, imagine how much the insurance companies would charge?…if everyone was forced to pay for it I reckon some of the big insurance companies would make a nice packet.

    If a Lib’s callin’ for it there has to be dollar signs in their eyes.

    N’

  31. Pro-development Liberal governments being far more likely to back applications.

    The exception being NSW Labor. No government in our history has been in the pockets of the developers more than the NSW Labor government, it is the cause of most of the problem they now find themselves in.

  32. Thats the main problem Mobius, and, why do the developers build there, because its where we want to live. When its not flooding, its just the perfect spot. Close to the river and nice and flat. Its only now when the houses are getting washed away, people are asking why.

    I heard on the radio this morning that Brisbane council had actually been offering to buy these houses in the most exposed flood zones back, with very little take-up.

    Sorry, but when it comes to pointing the finger, I think it inevitably must go back onto us. We want the lifestyle, if its maintainable or not.

    Miglo, you look different with glasses on?

  33. Tom, agreed with the proviso that purchasers are provided with the information that their ‘dream home’ has been built on a former flood plain. As we all know, developers are very adept at hiding this fact by filling in previous marshland and other ‘blemishes’.

    Nice and flat also suits the developers to a tee – minimal expense re levelling and roadworks.

  34. Yes Tom R. In this case it maybe too easy to blame governments on all levels and greedy developers, and developers do have a lot to answer for as do governments, but neither governments nor developers hid the fact the developments were going ahead on lands and areas prone to flooding, and the high risk areas are clearly marked on maps and plans that are there for the asking or a Google search away.

    In many cases the developers may not have made the information openly available but it was always there. They could not by law hide it, and as far as I can ascertain no developer or government had hidden or made difficult to obtain where the flood zones and risk areas were, especially for the high risk areas.

    But the worst I’ve heard is those people who on applying for insurance were told they couldn’t have flood insurance because of where they proposed to build/purchase, yet went ahead and constructed their Australian dream anyway. Surely huge alarm bells must have been going off in someone’s head when told you can’t get flood insurance because of where you live. Or is it a case of knowing that and thinking it didn’t matter because the government will bail you out in any case, as seems to be the way it is for so much nowadays.

  35. Tom, being an Adelaide boy you might recall the warnings that preceded the development of West Lakes. For those unaware, the site of West Lakes is on what used to be marshlands west of the city.

    The argument was that this area did not have long-term stability, yet now we see a Westfield shopping centre, hundreds of lake-side mansions, and AAMI Stadium which is the home ground for the AFL team Port Adelaide.

    Forty years down the track everything is still rock solid, but you do wonder.

  36. On Latenight Live some time back the subject of insurance policies and climate change was discussed. The big question was whether people living along the coast would be able to get flood insurance if it were confirmed that see levels were indeed rising.

    Interesting.

  37. I have to admit that I’m seeing part of Damo’s argument. I will always maintain that lending institutions should be more conscionable, but I guess it’s not entirely their fault that we have dishonest developers, corrupt councils and people with attitudes that everything bad only happens to other people.

    Having said that, my heart still goes out to those unsuspecting people whose homes, and perhaps lives, have now been ruined.

    Are the greedy developers concerned? Probably not.

  38. Tom R @ 12.13pm, couldn’t agree more; the buck does stop with us.

    You can arm yourself with information well before you enter the real estate market just by asking questions of land agents, land brokers, banks and other lending institutions and insurance companies.

    Other sources of information include mortgage brokers and insurance agents, who actually work for you.

    And going to the local council and picking their brains for information in their area of expertise would save a lot of heart ache, too.

    All it requires is a bit of effort and planning; time consuming perhaps, but well worth it.

  39. Nothing could illustrate more what we are facing with owners of homes in areas prone to damage is what occurred on the ABC News Special last night.

    Leigh Sales was talking in a forum to a live audience of Queenslanders who had been in the flood and those who helped including the rescue services like SES, Poilcie and military.

    A nicer, grateful and more stoic bunch you would not meet. They heaped praise on volunteers, neighbours, friends, services and governments, so this was no angry and upset mob, not the people Abbott is looking for.

    So towards the end in the discussion about mitigation and what can be done Sales asks the hypothetical:

    (paraphrased)
    “If the government as part of a mitigation plan said they would purchase your flood prone property and you would have to move, would you move?”

    The answer from one couple was very telling.

    No they wouldn’t move because first it is a once in a lifetime event, and more importantly even if the floods were to occur more often it is up to the government to put into place things to stop or alleviate the floods.

    I bet if that couple were told, OK if you want the government to construct mitigation just for your flood prone area and that mitigation would cost many billions with only those in the flood risk areas paying for it, they would take the government’s price for the house and move very quickly.

  40. I thought it would have been a developers responsibilty to ensure if they build in a flood prone area that they mitigate the flood risk by building so that the flood does not effect the building.

    Obviously the government is even repsonsible after a private operator making millions in profit does the wrong thing on land that should never have been built on.

  41. Migs,
    That You Tube video @11.08am on Jan 20 was powerful stuff and the sort of thing you should be getting into at Cafe Whispers. Nasking would be ideal, don’t you think? 🙂

  42. Shane, unfortunately it would be impossible to make a developer responsible for the construction as they wouldn’t have been able to develop the land in the first place without following the conditions imposed by Local and State governments.

    For example, the Fern Beach development north of Byron Bay is on a flood plain and the several hundred homes were built with conditions imposed by Byron Shire Council. The main one being that all homes were demountables so in case of flood they could all be mounted onto semi trailers and carted away.

    I kid you not. Imagine several hundred semis all hurtling down a suburban street to pick up people’s houses and cart them away. I was asked to run for Council when I lived in Byron Shire. I declined.

  43. No Shane, it is only the developers responsibility to build/develop for the correct zone and not deliberately mislead purchasers/clients as to the risks of the area they are building in. For instance a developer putting in a new housing estate on a flood prone area in Ipswich cannot tell land purchasers the land does not flood in their marketing, nor can they lie if asked about the risks inherent in the area or its past history. Just as that info is available to the developers it is also available to the purchasers of the land.

    Many don’t bother checking or asking, which is the first problem, but many do know and also find out when refused flood insurance for example, yet go ahead anyway in the correct belief that no matter what happens, even if they have no insurance, the governments will bail them out, as they will the businesses, and will also pay for much of the clean-up and rebuild. Then on top of that they also want governments to spend untold amounts of money, as long as they don’t get extra taxes and rates for it of course, to stop the flooding in their risk area, but refuse to leave that area to live safer elsewhere if ordered to by the government.

    Somehow from drought, bushfires to floods it has all now become governments’ responsibility and fault from start to finish and everything inbetween.

  44. To quote Mike Carlton in yesterday’s SMH:

    When is a flood not a flood? Answer: when an insurance company might have to pay out for damage from the torrent of water that has destroyed your home or business.

    It comes as no surprise to learn that the spivs who infest the insurance trade are busily dudding and dumping thousands of wretched Queenslanders and others.

    “Oh, that kind of flood,” they say smoothly. “No, it’s actually a riverine rising which is, of course, a very different thing, and if you look at page 267, clause 23b, of your policy …”

    Many people who thought they were covered for floods have now found they have lost everything. Smooth verbal assurances given when they took out their polices have amounted to nothing.

    The splendid Anna Bligh should name and shame the guilty shonks.

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