Property owners in Australian coastal areas face significant and increasing losses the from impact of climate change, according to a report out today.
Research by the Climate Institute warns the potential damage bill from coastal erosion is conservatively estimated at $88 billion excluding the value of land.
Listen to my report on "There Goes The Neighbourhood" from The Climate Institute
With growing evidence of changing weather patterns, the Institute says governments, insurers and especially major banks need to provide better information to investors.
Climate Institute chief executive John Connor says more than two percent of all houses are already exposed to moderate to extreme risks of flooding.
Read the Climate Institute report here
"Growing climate impacts means the costs of these and other hazards exacerbated by climate change will have worsening repercussions for households, the financial sector and ultimately the economy itself," Mr Connor said.
"There has been insufficient action from government, insurers and most notably the banks, perhaps surprisingly as they are mortgage lenders."
The claims are contained in the Climate Institute's report "There goes the neighborhood" which examines the climate change risks to Australian housing and the overall financial sector.
The warning is critical given that the economy directly or indirectly drives a third of the economy and accounts for 60 percent of the assets of the big four banks.
"People continue to buy homes that continue to be built and sold in areas that may be at more risk than they realise," Mr Connor said.
But Mr Connor says that while the climate risks "most banks have so far done relatively little to try and address this complex problem."
The research comes as the insurance industry continues to lobby local governments for more accurate flood mapping data to better address risks.
Mr Connor has called for great action from the finance sector and governments.
"It's not a political football. It's not ideology, it's real and we've got to get on with integrating climate change like other risks".
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| Climate Institute chief executive John Connor at Maroubra Beach Picture: Peter Ryan |
If some house values drop due to increased exposure to risk then wouldn't others rise in value due to their relatively smaller risk and the increasing demand for property in safer areas?
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