Posted on March 30, 2022
Twenty-five billion dollars worth of residential property is at risk due to increasing storm surges and coastal erosion, new research shows.
Coastal property is more at risk than ever, after significant development in popular beach towns over the past 30 years and a rise in beachside property values, CoreLogic’s Coastal Risk Scores for Financial Risk Assessment report, released on Monday, found.
Increasing coastal risk is pushing up insurance premiums and could affect property values, the group said, highlighting the recent floods in NSW and Queensland as an example of the devastation that extreme weather events can wreak on people and property.
“In the next three decades, coastal risk will crystallise, with the tangible effects of climate change already being felt in most parts of Australia,” CoreLogic head of consulting and risk management Pierre 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.”
He said understanding coastal risk was important to homeowners and potential buyers, who should inquire about the risk to a property and whether it might be sudden or gradual to decide whether to take out a long-term loan for that asset.
“Equally, for any financial institution, it is important to evaluate the potential downturn in property values or the concentration of a portfolio at risk,” he said.
The top 10 suburbs with the most value at risk are spread across the east coast, often in popular residential neighbourhoods or holiday towns with low elevation, high property values and a fast-receding coastline.
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