Rising Coastal Risks and Soaring Insurance Costs Impact Australian Property Market - Property Inc

Rising Coastal Risks and Soaring Insurance Costs Impact Australian Property Market

Australia’s coastal property owners are facing escalating challenges as extreme weather events increase in frequency and intensity, driving up insurance costs and affecting property values in vulnerable regions. This trend, highlighted by recent reports from ABC and insights from industry experts, is reshaping the landscape for homeowners and potential buyers.

Roxanne Libatique from ABC details the experiences of Maralyn Luchetti, who purchased a home with an ocean view north of Wollongong, only to confront unexpected coastal erosion and flooding shortly after moving in. “We were aware it was a coastal erosion area when we bought it,” Luchetti shared. “But then within months…there were a few big east coast lows with very big seas, very big rain events” .

Despite the evident risks, the allure of coastal living continues to draw buyers, with no significant dip in property values observed in certain areas. Mattias Samuelsson, a real estate agent from Ray White Helensburgh, notes, “People are still buying, properties are still being sold, people are still drawn to this lifestyle regardless of the risks” .

However, Eliza Owen from CoreLogic warns that regions experiencing more frequent extreme weather are likely to see long-term impacts on property values, especially where homes are not designed to withstand such events. “Areas with increasing levels of extreme weather events are going to see property values impacted long term,” Owen explains .

The rising cost of insurance is another critical issue, as highlighted by the Insurance Council of Australia (ICA). With some homeowners facing annual premiums in the tens of thousands of dollars, the financial burden is becoming prohibitive. “Flooding is one of the costliest extreme weather events in Australia,” an ICA spokesman stated, emphasizing the widespread risk .

Proactive measures are essential to mitigate these rising costs and risks. Andrew Dyer, from IAG, calls for increased investment in national disaster preparedness and resilience. “We had the Black Saturday bushfires then, straight off the back of that, we had three years of quite extreme flood events,” Dyer remarked, underlining the urgent need for comprehensive action .

As Australia continues to confront these challenges, the balance between desirable coastal living and the escalating costs and risks associated with it remains precarious. Homeowners and buyers must navigate these complexities as they adapt to the evolving realities of climate impact on property markets.

Reference:

https://www.insurancebusinessmag.com/au/news/property/extreme-weather-drives-up-insurance-costs-for-coastal-properties-490041.aspx 

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