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Coastal erosion puts $25bn of property at high risk
Over 22,000 residential properties are exposed to high or very high coastal risk.
Coastal erosion puts $25bn of property at high risk
Over 22,000 residential properties are exposed to high or very high coastal risk.
As the impacts of extreme weather on property remain front of mind for many Australians, new research has found that 22,135 dwellings nationwide with a combined value of nearly $25 billion are at a high or very high risk of coastal exposure.
Property research firm CoreLogic has developed a new “coastal risk score” to measure the potential impact of climate change over time, taking into account storm surges, long-term erosion and rising sea levels.
Nationwide, 2,187 houses and 2,062 units collectively valued at $5.3 billion were categorised as very high risk with the potential for gradual coastal erosion to reach the property within the next 30 years and a very high risk of significant storm surge impact.
A further 10,507 houses and 7,379 units valued at $19.6 billion were given a high risk score, potentially suffering from coastal erosion in the next 60 years with a high risk of significant storm surge impact.
“In the next three decades, coastal risk will crystallise, with the tangible effects of climate change already being felt in most parts of Australia,” said CoreLogic head of consulting and risk management Dr Pierre Wiart.
“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.”
Paradise Point on the Gold Coast had by far the highest total value of houses at high or very high risk at $1.47 billion, followed by Cronulla ($486.4 million), Port Melbourne ($483.8 million), Manly ($462.1 million) and Aspendale ($455.3 million).
Queensland had the highest concentration of properties with a very high risk of coastal exposure, according to CoreLogic, with a large number of houses in NSW, Tasmania, and South Australia also found to have a very high risk.
Nationally, CoreLogic determined that 109,672 properties with a combined value of $109 billion had a medium risk and could be impacted by coastal erosion within 120 years along with a medium risk of significant storm surge.
Meanwhile, for the 772,594 properties with a low risk, the timeline for coastal erosion stretches out to 120 years alongside a low risk of storm surge.
“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,” said Dr Wiart.
“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.”
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