Warming On Track To Slash RE Values By $571 Billion (AU) - 9% Of Total Residential Property
A Climate Council study warns the value of Australian real estate could plunge over the next decade unless future governments have the political will to deal with climate change.The research estimates residential property value losses of $571 billion by 2030 related to increased extreme weather events, inundation of some low-lying coastal properties and higher insurance premiums.
That would wipe approximately 9 per cent of the nation's total residential property value — about as much as has been lost so far in the current property downturn, which is on track to be the worst in Australia's recent history. However, these losses would not be evenly spread, as an estimated 5-6 per cent of property owners bear the brunt of climate change risks.
As insurance companies reshape their risk strategies to manage extreme weather events, the report predicts, the cost of insuring properties — particularly those on the coast — could become unaffordable for one in 19 owners, who would have to pay annual premiums equivalent to 1 per cent of their property value. A recent study by the Actuaries Institute — actuaries are the statisticians who calculate risk for insurers — warns that as many as one in 10 properties could become uninsurable by the end of this century due to climate change.
Climate risk expert and report author Karl Mallon warned insurance companies were constantly updating their risk strategies, and could hike premiums to deal with extreme events such as rising sea levels, heatwaves and floods. "Increasingly, Australians are also going to struggle to pay for home insurance. On current trends, by 2030 one in every 19 property owners faces the prospect of insurance premiums that will be effectively unaffordable," Dr Mallon said.
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https://www.abc.net.au/news/2019-05-09/climate-change-could-wipe-571b-off-property-values/11096768
