This article is from the Australian Property Journal archive
MILLIONS of Australian homes are at risk of natural disasters and most homeowners are unaware, leaving them “sitting ducks” and potentially uninsurable as climate change creates more extreme weather events across the country.
Domain’s new 2024 Perils Report shows 5.6 million homes – nearly half of all Australia’s homes – are at risk of bushfire, with an estimate value of $4.66 trillion.
“Australians are struggling. Affordable housing is becoming increasingly inaccessible, we have unprecedented cost-of-living pressures, and we are seeing more consistent and extreme weather events which are significantly devaluing our homes,” said Domain CEO Jason Pellegrino said.
“Of greatest concern, is that many Australians are living on land facing peril in order to have a place to call home.
Domain’s research shows that only 29% of Australians know about their property’s risk of being impacted by a natural disaster, and just 20% know where to go to seek information about these risks.
As anticipated, the larger states have the vast majority of homes at risk of bushfire, dominated by NSW (1.9 million homes valued at $2 trillion), Queensland (1.6 million homes valued at $1.28 trillion) and Victoria (763,000 homes valued at $592.3 billion).
Tasmania has the highest proportion of homes within the state at risk, at three-quarters, followed by Queensland (66.5%), NSW (52.4%) and Western Australia (52.2%).
Bushfire risk heavily skews to the lower ratings, with 0.3% of homes at high risk. However, this equates to over 32,000 properties with a significant bushfire risk across Australia – at an estimated value of $31 billion. Victoria – which has only one-quarter of its homes at risk of bushfire – has the most properties with a high bushfire risk rating, with 15,082. The Upper Yarra Valley and Mount Dandenong-Olinda carry the highest and third-highest bushfire ratings in the country respectively, with Belgrave-Selby coming in 10th.
By state, next are NSW and Western Australia. Most are in regional areas, although outer suburbs on the urban fringe of capital cities are also at risk.
South Australia has 30.9% of its properties carrying some level of risk, while the ACT has 32.5% and the Northern Territory 45.3%.
For each increase in bushfire risk rating, the value of a home decreases by 2%.
Queensland has the highest proportion of at-risk properties when it comes to flooding, while NSW faces the largest expected losses in property damage coming in at over half a billion dollars per year.
There are 953,000 Australian homes are at risk of flood — 8.1% of all properties — with an estimated value of $768.5 billion.
“Despite this, there persists a concerning trend of continued construction and residential development in flood-prone zone,” Pellegrino said.
NSW has the most properties at high risk of flooding, with proportionately 1.8% of homes within the state sitting in this category, representing 67,616 properties – almost half of the total number of high-risk properties across Australia.
NSW holds the highest proportion of properties and total property value at high risk of flooding, with over $49.6 billion, or 19.4% of the total at-risk value.
Queensland comes in second for properties at high risk of flooding, with 40,915, constituting 1.6% of all properties within the state. Despite having the third-highest number of high-risk properties, Victoria has one of the lowest proportions, with only 0.5% in this category.
Photo: Adapt NSW
NSW dominates flood risks
NSW locations dominate the top 10 list for annual flood risk, with Ballina, Tweed Heads South, Grafton, Coonamble and Tweed Heads taking out the top five, and Maclean-Yamba-Iluka and Lismore at seventh and eighth.
For every percentage point increase in the chance of a one-metre flood, property value drops by 1.1%, while for a two-metre flood it drops by 1.3%.
There are just over 160,000 properties within 150 metres of Australia’s coastline. Of these, roughly one-in-10 (10.8%, or almost 17,500) have a risk of coastal erosion.
“This means 89% have no associated threat, underpinning the stability and security of most coastal homes,” Pellegrino said.
Queensland has the highest volume of properties at risk (7,699), accounting for 44% across Australia. NSW follows with 4,254 homes at risk, then South Australia with 2,243.
Victoria has one of the lowest volumes at 241 and the Northern Territory 649.
Queensland accounts for the highest value at risk at $11.26 billion. It also has the most significant portion skewed to “high” or “very high” risk at $8.37 billion (proportionately, this accounts for 74% of the value at risk).
NSW may have a third fewer coastal properties than Queensland; however, it is not far behind in value at risk, at $9.42 billion. Despite NSW’s lower volume and higher value than the sunshine state, NSW skews to lower risk categories.
