Almost one million homes and apartments throughout Australia are at risk of storm surge and erosion, a new analysis has found.
And more than 22,000 homes are likely to be severely impacted by storm surge or long-term erosion over coming decades.
In its latest report, real-estate information services firm CoreLogic has launched the inaugural version of its Coastal Risk Scores for Financial Risk Assessment.
The report – which analyzed 98 percent of residential properties around Australia – identifies those which are at risk due to erosion from either storm surge or long-term erosion due to regular tidal activity.
All up, it found that:
- 22,135 properties were identified as being at either high or very high risk of erosion. This includes 12,694 single-story homes and 9,441 apartments. Such properties are likely to suffer either gradual erosion which reaches the dwelling over the 30 years (very high risk) or the next 60 years (high risk) and are at very high or high risk of significant storm surge impact.
- 904,401 properties are at some risk (low/medium/high/very high) of erosion due either to storm surges or long-term erosion.
- All up, $852.6 billion worth of residential real-estate is at coastal risk.
Rated by property value, Paradise Point the Gold Coast has the greatest exposure on account of its high density and thus the high number and value of homes which are close to the shoreline.
This is followed by Cronulla, Port Melbourne and Manly.
Common traits of top 10 suburbs are proximity to the coast, low elevation, rapid coastal retreat and high property values.
In terms of states, Queensland has the highest concentration of properties which are at high or very high risk on account of densely populated coastlines along the Gold Coast and Sunshine Coast.
The latest report follows last year’s United Nations Intergovernmental Panel on Climate Change (IPCC) report published in August 2021, which pointed to the fact that Australia’s sea levels are rising at a rate which is faster compared with the global average.
The report also follows severe rain and storms along much of Australia’s east-coast.
Dr Pierre Wiart, CoreLogic Head of Consulting and Risk Management and author of the report, said the damage caused by recent weather in south east Queensland and NSW serve as a reminder of the impact which extreme weather events can have on Australian people and property.
Wiart says climate impacts on coastal areas are likely to materialise over coming decades.
He says the Coastal Risk Score will help to inform homeowners, future buyers and financial services sectors such as insurers and lenders, of potential future climate-related coastal risks.
“In the next three decades, coastal risk will crystallise, with the tangible effects of climate change already being felt in most parts of Australia,” Wiart said.
“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.
“Understanding the coastal risk associated with those properties is important to every owner, potential buyer and ultimately our property and financial sectors that are supporting the expansion of new coastal properties in number and in value.
“Consequently, credit risk and long-term loans are directly impacted by these natural trends. Equally, for any financial institution, it is important to evaluate the potential downturn in property values or the concentration of a portfolio at risk.
“Increasing coastal risk is also adding pressure on insurance. Property owners face ballooning insurance premiums and restricted insurance coverage, together diminishing their insurance affordability and protection of their significant assets.”
CoreLogic Research Director Tim Lawless says the trend for coastal living has accelerated during COVID as even more people have been attracted to waterfront enclaves – causing unprecedented increases in housing growth rates.
He says Australia’s best coastal properties have long attracted premiums amid spectacular views, lifestyle appeal and restricted supply.