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New data has revealed the value of residential property estimated to be at risk of damage due to increasing coastal surges, erosion and flooding.
In the wake of the most recent, devastating floods affecting South-East Queensland and Northern NSW, many people in the property market are taking a second look at vulnerable areas in which real estate might be at risk of damage or destruction due to climate change.
CoreLogic’s inaugural Coastal Risk Scores for Financial Risk Assessment whitepaper quantifies this concern, introducing a new Coastal Risk Score to measure the potential impact of climate change on Australian properties over the coming years.
The framework takes into account storm surge (rapid erosion) and change in coastline (slow erosion) as well as ongoing rising sea level trends to calculate and assign a coastal risk rating for 98 per cent of Australian residential property.
By their analysis, 2,187 houses and 2,062 apartments valued at $5.3 billion collectively are deemed to be at very high risk of damage due to coastal retreat and storm surge impact over the next 30 years. A further 10,507 houses and 7,379 apartments fall within the high risk category. Together, they’re worth approximately $19.6 billion.
The research also identified the 10 Australian suburbs with the greatest number of vulnerable properties, alongside the value of property at risk.
Paradise Point, Qld, $1,466.9 million
Cronulla, NSW, $486.4 million
Port Melbourne, Vic, $483.8 million
Manly, NSW, $462.1 million
Aspendale, Vic, $455.3 million
Runaway Bay, Qld, $424.1 million
Brighton, Vic, $415.4 million
Caloundra, Qld, $380.5 million
Collaroy, NSW, $375.9 million
Golden Beach, Qld, $340.6 million
Dr Pierre Wiart, CoreLogic’s head of consulting and risk management and the whitepaper’s author, said coastal risk would become an increasing issue for Australians over the next three decades, though the “tangible effects of climate change are already being felt in most parts of Australia”.
“This is leading to direct physical and financial consequences. Coastal risk has far-reaching implications for the country’s property market and its supporting financial sector, including property valuations, home loan viability and insurance premiums,” Dr Wiart said.
The report noted that according to the United Nations Intergovernmental Panel on Climate Change (IPCC) report, Australia’s sea levels are increasing at a rate higher than the global average.
This fact, coupled with CoreLogic’s findings, make it increasingly clear why it’s important for property owners, buyers, and ultimately those in the property and financial sectors to understand the risks associated with coastal properties, according to Dr Wiart.
“Identifying coastal risk has never been more urgent than today,” he said.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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