An article in The Australian on 14 January 2011, “Flood damage bill to top $3bn”, explains why the cost to repair houses damaged by flood is relatively high.  According to the article, Professor John Handmer at the Royal Melbourne Institute of Technology said contemporary building technology made extensive use of lightweight materials that were water sensitive. "An old Queenslander built of hardwood isn't going to suffer that much structural damage from soaking in water, but a modern house full of composite materials is likely to face a full-scale interior reconstruction." 
In particular, the extensively used dry-wall plaster-board products are water sensitive and if inundated by water, they disintegrate and need to be replaced.  Plaster-board is far quicker and cheaper to install than internal solid plastering, and has reasonable fire resistant properties, but cannot withstand soaking and is susceptible to mould growth, which is hazardous to health.
Read the full article here : http://www.theaustralian.com.au/news/nation/flood-damage-bill-to-top-3bn/story-e6frg6nf-1225987413403