A number of factors influence the direct consequence of flooding. The most important are depth of inundation, velocity, duration of inundation and water quality and the interaction of these factors with human society. Although computer modelling techniques exist that can provide an estimate of these variables, this information is seldom used to estimate the impact of flooding on a community. This work describes the first step to improve this situation using data collected for the Swan River system in Perth, Western Australia. Here, it is shown that residential losses are underestimated when stage–damage functions or the velocity–stage–damage functions are used in isolation. This is because the functions are either limited to assessing partial damage or structural failure resulting from the movement of a house from its foundations. This demonstrates the need to use a combination of techniques to assess the direct cost of flooding.