Climate risk consultancy outlines global warming fallout on insurance, property values
Climate risk consultancy outlines global warming fallout on insurance, property values
12 September 2022
Climate risk consultancy Climate Valuation says property values can “expect to take a hit” because of global warming, with “direct” implications also for premium affordability.
About 1 in 8 Australian homes may be at moderate or high risk from climate-related hazards by 2030, according to the consultancy.
The consultancy says the number of properties at moderate or high risk is expected to increase from 1.6 million currently to 2.6 million in 2050.
It estimates the total value of property value correction is likely to exceed $700 billion by 2100, based on current housing stock and valuations.
And in some extreme cases, coastal areas may see complete loss of value by 2100 due to rising sea levels and storm surge.
“Climate change directly impacts the affordability of home insurance with technical insurance premiums modelled to rise by an average of 70% in high-risk locations and even further in the worst affected areas,” the consultancy says.
“Changes in insurance costs will have a knock-on effect to the home loan market and mortgage availability in higher risk areas, further compounding declines in housing values.
“Insurance affordability is crucial to supporting communities and national economic recovery after natural disasters.”
The consultancy says it has developed an online tool for Australian homeowners in response to the climate threat.
The portal provides tailored individual reports for specific properties, including a site check report for free and a comprehensive climate impact report for $99.
