Yahoo Finance $25 billion of property under threat: The 10 suburbs most at risk
Increasing storm surges and coastal erosion have the potential to impact $25 billion worth of Australian residential coastal property, new research from CoreLogic found.
The report utilised a new Coastal Risk Score, which measured the potential impact of climate change over time.
Dr Pierre Wiart, CoreLogic’s head of consulting and risk management, said the damage caused by recent weather events in South-East Queensland and NSW were a tragic but timely reminder of the untold devastation extreme weather events could have on Australian people and property.
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Wiart said the Coastal Risk Score would 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.”
Wiart said the impact of climate change on Australia’s coastal erosion and rising sea levels was alarming and required urgent attention.
“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,” he said.
“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.”
Australian suburbs most at risk
CoreLogic’s analysis found Queensland had the highest concentration of properties at ‘Very High’ risk for the number of both individual houses and units, owing to the Sunshine and Gold Coast’s densely populated coastlines.
However, New South Wales, Tasmania and South Australia also had a large number of individual houses classified as being at ‘Very High’ coastal risk.
The common traits of the top 10 suburbs are their close proximity to the coast, low elevation, fastest coastal retreat figures and high property values.
Top 10 suburbs by number of buildings exposed to CoreLogic’s Very High and High Coastal Risk Score.
Suburb (LGA) | State | Detached houses | Apartment dwellings | Value at Risk (VaR) |
Paradise Point (Gold Coast) | QLD | 406 | 43 | $ 1,466.9 million |
Cronulla (Sutherland) | NSW | 8 | 254 | $ 486.4 million |
Port Melbourne (Port Phillip) | VIC | 29 | 202 | $ 483.8 million |
Manly (Northern Beaches) | NSW | 21 | 109 | $ 462.1 million |
Aspendale (Kingston) | VIC | 112 | 136 | $ 455.3 million |
Runaway Bay (Gold Coast) | QLD | 136 | 219 | $ 424.1 million |
Brighton (Bayside) | VIC | 50 | 43 | $ 415.4 million |
Caloundra (Sunshine Coast) | QLD | 20 | 523 | $ 380.5 million |
Collaroy (Northern Beaches) | NSW | 34 | 74 | $ 375.9 million |
Golden Beach (Sunshine Coast) | QLD | 100 | 294 | $ 340.6 million |
Tim Lawless, CoreLogic research director, said while Australia’s property wealth was principally distributed on the eastern and south-eastern seaboard, a significant proportion was located in the country’s premium coastal, river and harbourfront suburbs.
He said in the past two years the trend for coastal living had accelerated, drawing even more people to popular waterfront enclaves, resulting in unprecedented increases in housing growth rates.
“Spectacular views, lifestyle appeal and limited supply has long attracted a premium for Australia’s best coastal properties,” Lawless said.
“In the past two years however, there has been a broad demographic shift where more Australians are prepared to consider housing options outside of the capital cities.
“Working from home has been a catalyst of this trend, with more people basing themselves in regional locations during the pandemic.”
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