While many areas are still reeling from the emotional and financial impact of Australia’s summer of bushfire disasters, analysis by industry leading property research expert’s PRD, has revealed that local economies will soon flourish again and are tipped to come back bigger and better than before.
Historically, local economies in bushfire affected towns undergo a resurgence within just a year of the disaster. PRD analysed the long-term effects of four previous catastrophic bushfires in Australia and found without fail that each community was in a better economic position just a few years down the track.
PRD Managing Director Todd Hadley commented “While it may be hard now for anyone to believe their community will survive, let alone thrive again, our research shows that is exactly the case. Our analysis should give confidence to those wishing to remain in their local area but are unsure about its future economic viability.”
The research examined the economic effects of four previous Australian bushfire disasters: the Canberra bushfires in 2003, Black Saturday bushfires in Victoria in 2009, Perth Hills bushfires in 2011 and Pinery bushfires in South Australia in 2015.
Todd Hadley believes that this report could not have come at a better time, as this research should give a glimmer of hope to those struggling to see the future.
PRD Chief Economist, Dr Mardiasmo said “it is important to acknowledge there has been damage that cannot be quantified on a personal level, and this emotional anguish cannot be discounted, but there are some real positive economic benefits when communities choose to unite and persist in the process of rebuilding.”
“Each of the four previous bushfire affected areas analysed experienced an increase in Gross Regional Product (GRP) growth in the year immediately following the bushfires. For example, the Perth Hills region experienced an increase in GRP growth from +0.2% in the year of the bushfire, up to +5.8% in the year following”, Dr Mardiasmo advised.
Median house prices flattened in all locations in the year of the bushfires, but by the second-year medians were above those in the year of the bushfires.
It was found that economies started to turn around once compensation and insurance payments filtered into the communities, and the towns were rebuilt. Demand for construction often bought more people to the towns, boosting demand for accommodation, food and services. Once charities passed on donated funds, local economies also started to improve with that money being spent locally helping many business owners get back on their feet. It essential these funds are quickly passed on to residents so that the economic cycle is kick started in these towns again.
“It is important for government-owned infrastructure to be quickly fixed to allow people to visit towns and spend money there. While the effect on economies was initially catastrophic in the median to long-term, history shows these communities can rise and flourish again, particularly through the significant short-term spending injected to rebuild affected areas”, Dr Mardiasmo emphasised.
Todd Hadley closed off by saying “one of the biggest things everyone can do to help these communities revitalise their economies is to visit them. Fill up your petrol tank and use the local goods and services”.