Australians living in climate change hotspots could see the value of their homes plummet and insurance premiums soar as climatic conditions deteriorate and natural disasters become more common, experts have warned.
Melbourne’s CBD, Sydney’s inner west, and the Gold Coast in Queensland were among the areas most at risk.
Houses in low-lying areas, on eroding seashores, or in bushfire zones could soon find their values slashed by hundreds of thousands of dollars due to extreme weather events, made more common and more intense by climate change.
These extreme weather events will make insurance more costly or harder to come by, and will become major sticking points for prospective buyers, Mozo’s property expert Steve Jovcevski told The New Daily.
“The impacts of climate change will have a major domino effect on the Australian property market,” he said.
“Australians should be aware that a property’s value doesn’t change when an extreme weather event occurs, but when the market determines it will occur.”
The Australian Business Roundtable for Disaster Resilience & Safe Communities revealed the total cost of natural disasters is expected to soar to an average cost of $33 billion by 2050.
Mr Jovcevski said people will realise living in flood, erosion, or bushfire prone areas is not an ideal way to live.
“Who wants to live like that?” he said.
Mr Jovcevski identified 20 areas in Australia as high property risk for buyers due to anticipated effects of climate change in the next 30 years.
Those areas include:
- Melbourne’s CBD
- Caringbah, Kurnell, Cromer, Manly Vale, NSW
- Parramatta River, Homebush Bay, Newington, Silverwater, NSW
- Cooks River, Arncliffe, Marrickville, NSW
- Surfers Paradise, QLD
- Cairns, QLD
- Murray Darling Basin
- Lorne, Aireys Inlet, Fairhaven and Anglesea, VIC
- Mount Buller, VIC
Professor Ralph Horne, Deputy Pro Vice-Chancellor of Research and Innovation for the College of Design and Social Context at RMIT University, agreed with the prediction.
The effects of extreme weather were already becoming visible to city dwellers, some of whom have suffered three once in a 100-year storms in the last 10 years, he said.
The recent storm and flash flooding in Melbourne demonstrated the damage extreme weather events would cause, Professor Horne said.
“It’s not unbelievable, it’s actually kind of happening,” he said. “Climate change will manifest in property damage in different ways.”
Professor Horne, who is also director of the Cities Programme, the urban arm of the United Nations Global Compact, said governments at local, state and federal level needed to improve building standards to help Australian cities cope.
“It’s not rocket science to make reasonably good guesses on how to improve our houses.”
Larissa Nicholls, research fellow at the Centre for Urban Research at RMIT, told The New Daily many Australians do not consider building or buying houses designed to cope with extreme weather.
“As people become more aware and experience heat waves they will look for other places to live,” Dr Nicholls said.
“We certainly don’t build quality housing in Australia as a standard approach.”
This summer’s heatwaves and the warnings about the burden on the electricity system – largely due to the heavy draw from air conditioners – would show the need for a rethink, she said.
“We’re at a crossroads in Australia, whether we invest in the electricity grid or invest in measures to reduce our usage.”