''Those people whose buildings weren't really damaged will probably stay.''
The 935-acre site was recently acquired by the Lockyer Valley council.
A fast-tracked plan means development will start in June and the first residents should be able to move into their new homes by the end of the year.
The remaining stages of development will be completed over the next two years and the entire project is expected to cost the council between $30 million and $40 million.
Cr Jones said it was important not just for safety reasons,but for psychological reasons,that residents move to a new,higher area.
''When we have a heavy storm now and people are in their beds at midnight hearing water run underneath them they’ll be up on the hill and they’ll know they’re safe,’’ he said.
Cr Jones said he believed the new town would attract hundreds of new residents as well,sparking a''resurgence''for Grantham.
''What we’re doing is we’re actually building a master-planned community on the hill there so there will be blocks for sale to the public as well,''he said.
There will be 400 residential blocks in the new residential township,he said,and expected about 100 of those to be taken by people affected by the floods.
''Instead of the town being a ghost town or a sad story we're actually looking at bringing new residents in. Grantham will become a more exciting place.''
Cr Jones said he believed the new town would attract people who worked in Brisbane or Toowoomba.
''It will be a resurgence and a new era for Grantham and most importantly it will keep people here,’’ he said.
The master plan for the new town includes a community centre,showgrounds and market place as well as memorial parklands.