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‘Uninsurable’: The suburbs where homes are most at risk

·Personal Finance Editor
·3-min read
An aerial view of a suburbs in Tweed.
Some suburbs are being deemed 'uninsurable' for being vulnerable to climate disasters. (Source: Getty)

Australia is highly susceptible to extreme weather events, with thousands of homes at risk of severe flooding and fires.

New research from Savvy has determined which areas are the most vulnerable to climate disasters.

Using a combination of modelling from the CSIRO, University of New South Wales, University of Queensland, the US National Oceanic and Atmospheric Administration, and data from Climate Valuation, Savvy determined the Maximum to Date Value at Risk (MVAR) of extreme weather and climate hazards.

The MVAR is essentially the annual risk of damage to an asset.

Properties with an MVAR in excess of 1 per cent of the total replacement cost are considered “high risk”.

As such, insurance companies may set premiums beyond what is normally affordable, effectively refusing to insure a dwelling.

“This could have a massive flow-on effect for house prices and gaining home finance in these areas,” Savvy home finance expert Bill Tsouvalas said.

“No one will want to live in an uninsurable property and a lender will shy away from providing finance for it.

”It could very well mean the death of some towns as they become uninhabitable from, not just a climate perspective, but economically.”

Top Australian locations vulnerable to weather events

Greater Shepparton, Victoria

Greater Shepparton, Moira, Campaspe, Mitchell, and parts of Strathbogie have the highest concentration of at-risk properties in the nation, with 27.4 per cent out of 94,280.

Greater Shepparton is considered rural, though contains major regional centres such as Shepparton, which could be considered a regional urban area.

In this region, 26.5 per cent are at high risk of riverine flooding and 1.5 per cent are at risk of surface water flooding.

“By 2030, there will be 1,607 properties in this area at ‘high risk’ for surface water flooding and a further 2,140 properties at ‘medium risk’,” the Savvy research found.

Tweed, Byron, Ballina, NSW

Bordering Queensland to the north, the Tweed-Byron-Ballina area includes major regional centres such as Byron Bay, Ballina, Hastings Point, Tweed Heads, and Mullimbimby.

“Though once considered rural, these locations are becoming increasingly suburban,” the report said.

Of 106,455 properties, 20.9 per cent are considered high risk.

“Further, being in the federal electorate of Richmond, these areas have lower-than-average incomes compared to the rest of the country,” the report said.

“It suggests extreme weather events are being experienced by those who can least afford them.”

Maranoa River area, Queensland

The Maranoa River area is bundled up into a regional electorate covering almost 750,000 square kilometres in the southwestern corner of Queensland.

Towns located in Maranoa include Charleville, Cunnamulla, Dalby, Roma, Kingaroy, St George, Stanthorpe, Winton, and Warwick.

Of a total of 132,078 properties, 14.8 per cent are at high risk of extreme weather events.

Of those, 13.9 per cent are at high risk of riverine flooding, and 0.6 per cent are at risk of bushfires.

“In the regional town of St George, it’s estimated that 70 per cent of properties will be uninsurable due to flood risk by 2030,” the report said.

Lockyer Valley & Scenic Rim, Queensland

This area spans roughly 7,500 square kilometres of the Gold Coast hinterland, the area between Logan and the New South Wales border and the Lockyer Valley west of Ipswich.

Of 88,952 properties, 13.6 per cent are at high risk - 9 per cent of properties are at high risk of bushfire, 3.6 per cent are at high risk of riverine flooding, 0.4 per cent are at high risk of surface water flooding.

“By 2030, the risk of fire will affect a significant number of the properties in the communities of Yarrabilba, Canungra, Greenbank, Kairabah, and Jimboomba,” it said.

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