NSW towns impacted by bushfires set for economic recovery in next few years

NSW towns impacted by bushfires set for economic recovery in next few years nmprofetimg 1323
Views Of NSW South Coast Following Devastating Bushfire Season  NSW towns impacted by bushfires set for economic recovery in next few years capi e8880e0f869d31877370e0df6a952f9d e1a878f25bfc3af48337f46cc972d74d

The bushfires devastated many regions of NSW. (Photo by Brook Mitchell/Getty Images)

Many NSW towns are still reeling from the emotional, physical and financial impact of the summer of bushfire disasters. Historically, these local economies in bushfire-affected towns undergo a resurgence within just a year of the disaster, with each community typically in a better economic position within a few years.

But the impact of the coronavirus is going to be a setback in this recovery, just as the marketing campaigns to encourage visitors was getting under way.

Recent auction offerings in NSW bushfire regions have not fared well, as it is just too early for the positives of investment to outweigh the obvious nearby signs of devastation.

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Views Of NSW South Coast Following Devastating Bushfire Season  NSW towns impacted by bushfires set for economic recovery in next few years capi e8880e0f869d31877370e0df6a952f9d 1c416fc8aa084ec805b68855c748a393

Many of the impacted areas are popular with tourists. (Photo by Brook Mitchell/Getty Images)

Median house prices flattened in bushfire locations in the year of the bushfires, but by the second-year medians were above those in the year of the bushfires, according to the national estate agency, PRD, which has produced a research report, Australia Bushfires: The Real Estate Perspective. It gives a glimmer of hope to the devastating impact many communities have experienced. 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.

“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,” the PRD managing director Todd Hadley noted. “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. The PRD chief economist, Dr Diaswati Mardiasmo acknowledged there has been damage that cannot be quantified on a personal level.

“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,” she said. “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.” The research found economies started to turn around once compensation and insurance payments filtered into communities.

This week the NSW state government announced a grant for businesses who have been indirectly affected by the bushfires and have lost business as a result.

Katy Perry Performs Fight On Concert For Firefighters And Bushfire Victims In Regional Victoria  NSW towns impacted by bushfires set for economic recovery in next few years capi e8880e0f869d31877370e0df6a952f9d b9d36bd032d139aa68781c8f55e06888

Singer Katy Perry performed a concert for those impacted by the fires. (Photo by Daniel Pockett/Getty Images)

There are 17 NSW LGAs eligible for this grant. Eligible businesses must have experienced a 40 per cent drop in revenue over a three-month period, compared to the previous year, as a result of the bushfires.

Deputy Premier and Minister responsible for Disaster Recovery John Barilaro said about 20,000 NSW small businesses will be eligible.

As the towns were rebuilt, demand for construction often brought 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.