If it flooded once every 7 years, and cost 5% of the value of the house each time, then over a 50 year lifespan of the house it would cost about 35% of the house. So you should only pay about 65% of the value of an equivalent un-flood-able house, less the value of the hassle and worry involved.
So a house that floods should be worth about 50-65% of one which doesn’t.
I would but I wouldn’t pay what would otherwise be considered market rate.
If I was happy that the location couldn’t ever flood to anything above knee height I’d give it consideration and bid no more than 50% of what would be market price but I’d decorate downstairs accordingly, have sandbags always ready and an elevated parking space for my car.
Would an EA sell to me? Probably not. They’d probably wait in the hope that someone with more money than sense happens along and sell to them at closer to perceived market rate.
You can mitigate the damage by renovating the house to make it more flood tolerant, tiled floors, cement boards instead of plaster board on the walls and electrics that are wired from above rather than below. Plus having stuff that can be easily lifted above the water line.
But then again, do you really want to go through the stress of enduring a flood, even in a resilient house!
Raising power sockets. No plasterboard. Tile floors. No wood. No heavy sideboards or similiar which couldn’t be lifted above flood height.
Sandbags would be the primary defence though along with a cheap two stroke water pump.
I’ve given this much consideration while parked in traffic jams trying to get over the Liffey at Lucan. There’s a long row of houses there which cope with the threat of flooding a number of times a year and at certain times of the year they don’t even bother to put away the sandbags. If my choice was to live in an area with flood risk near my place of work or else only be able to afford to commute from Rochfortbridge I’d give the flood risk house consideration.
I seriously doubt that the appropriate discount will turn up in the price. There’ll be enough people who don’t do the research or don’t evaluate the risks correctly, and who’ll end up paying close to full price for a normal house.