Climate change is a hot topic right now (pardon the pun). And so it should be, with leading climate scientists painting a concerning picture.
On the home front, we know that Australia is heading towards a warmer future and one where bushfire, drought and flooding will occur with increasing frequency and severity. These facts have now been proven, with data released in August that Australian land areas have warmed by approximately 1.4 degrees in the last 111 years. Furthermore, with our sea levels rising beyond the global average, shorelines are retreating at an alarming level in several locations around Australia’s coastline.
The effects of all this are far-reaching, and housing is no exception. Climate change will likely impact where and how we choose to live as well as the costs associated with property ownership. Let’s look more closely at some of the potential implications of a changing climate on housing in Australia.
Construction costs may increase
Requirements like bushfire attack levels can increase construction costs. The Bushfire Attack Level (BAL) rating applied to a property impacts how it is built and re-built as well as the materials used. According to insurance firm, AAMI, it can cost more than $100k extra to rebuild properties in areas deemed higher risk for bushfire. With bushfires likely to increase in the future due to climate change, so too will the number of high BAL-rated properties.
Costs associated with property ownership could rise
Insurance companies use BAL ratings and flood risk when calculating premiums. Take flooding for example. With rain events expected to increase and sea levels rising, more areas will be deemed at risk of flooding in the future. This will lead to increases (possibly significant) in insurance premiums. With insurance a necessary part of property ownership, the result will see an overall increase in the cost of holding property.
Moreover, levies to deal with climate change could become the norm, further impacting the cost of property ownership.
Sea levels may threaten more coastal properties
According to the Australian Academy of Science, if sea levels rise one metre by 2100, up to 250,000 properties will be at risk of flooding. We have already seen the damage caused to coastal properties in some coastal suburbs of Australia and some councils have been more proactive than others about mitigating the risk. For instance, in Byron Bay, NSW, the local council now requires at-risk new buildings to be demountable, so they can be moved if necessary.
Buyers may become more selective about where they buy
A climate risk profile may eventually be linked to every property advertised for sale. This is likely to cause buyers to become more discerning about where they choose to purchase and live and will also likely impact what they are willing to pay for low versus high-risk properties.
It’s not too late to make a difference
Every single one of us can play a part in slowing down climate change through global warming, if not for ourselves, for future generations. If we all work together by becoming more aware of the simple changes we can make right now, we can make a difference.