This week, the Climate Council has delivered a particularly alarmist warning about increasing flood risks for Australian residents. They announced that approximately 2 million of the country’s 11.7 million single-family homes have suddenly become vulnerable to flooding. This staggering number translates into one out of every six homes being at risk. Likewise, Queensland and New South Wales are consistently ranked as the states hit hardest by this environmental scourge. By contrast, Tasmania and the Australian Capital Territory (ACT) are seeing a much-reduced scale of flood risk.
The consequences of these threats are already playing out across the housing landscape. Homes in flood-affected suburbs such as Chelmer and Graceville, which are located near the Brisbane River, have been heavily impacted. They’ve decreased by 10.6 percent—or roughly $303,000—since the onset of chronic flooding damage. Brisbane has been hit by 10 flood events since 2010. This has increased anxiety among house owners over the future value of their homes.
Brisbane suburbs are far from the only areas in this fight. It’s not just Southeast Louisiana; other regions are experiencing decreased property values due to assumed flood risks. Homes in the once-buzzy waterfront suburb of Mermaid Beach have experienced a 7.8 percent decline in value. Even more striking, only 16 percent of properties sit in federally designated flood zones. In western Sydney, homes located in low-lying areas, such as Pitt Town and McGraths Hill, would experience a major value decline. They are on average $363,500 less valuable than comparable homes that don’t face flood risk.
Although wealthier communities have seen less severe declines in property values, capped by Prop 13, the situation is dire. Interestingly, locations such as Noosaville and Noosa Heads still lure buyers with their beautiful coastal vistas and sought-after beach lifestyles. This seduction continues, despite the growing danger of flooding. Climate Council spokesperson McKenzie said house prices in these areas would continue to increase. They are appreciating at a far lower pace than homes that do not face flood risks.
McKenzie was clear that climate change doesn’t come with a “silver lining.” Indeed, its effects are unambiguously at work in driving down property values. She implored prospective homebuyers to be mindful of the dangers ahead when making decisions on buying houses in flood-affected regions. “People don’t fully appreciate the risks yet,” she stated, highlighting a widespread lack of awareness regarding the long-term impacts of climate change on property values.
In her testimony, McKenzie raised concern over increasing flood risk. He cautioned that these risks would lead to lower home values, increasing economic and social inequity in the housing market. The issue deepens inequality, she cautioned, as people who can pay to relocate to safer areas will have their wealth appreciate while those unable to do so will suffer wealth loss from decreased housing values.
To meet these challenges, McKenzie called for urgent reforms to planning legislation. He wants to stop new construction in flood-prone areas. It’s making overdevelopment more vulnerable. Climate change is rapidly and radically reshaping Australia’s housing market. It’s important for both policymakers and future homeowners to address these urgent needs in the first place.
