A climate risk expert said Sydney’s coastal homeowners are “sitting ducks” to property devaluation and foreclosure because of climate change,
The Sydney Morning Herald (
SMH) reported.
Dr Karl Mallon, director of science and systems for Sydney-based consultant Climate Risk, said one problem facing homeowners in Australia is that “you can build a house which is insurable tomorrow, but is wholly unsuitable 30 years down the track.”
The statement follows Climate Council’s independent report, titled
Super-charged storms in Australia, which asserted of Australia’s high vulnerability to “storm surges associated with tropical cyclones and extra-tropical cyclones, including [more intense] east coast lows.”
“The evidence for the link between climate change and extreme weather is already very strong for heatwaves and bushfire weather, and it is getting stronger for intense cyclones and heavy rainfall events,” the report said.
According to Climate Risk, since 2010 Australia has been hit by seven storms that cost more than $500 million each; and another five storms that resulted in over $1 billion in insured losses,
SMH reported.
Mallon said that many Australian homeowners do not realise that their property gets revalued, not when an extreme weather event takes place, but “when the market realises the event will occur”.
He also cited the “disconnect” between banks, government planning, and the insurance industry, which leaves Australian homeowners vulnerable to “climate change foreclosure”,
SMH reported.
“There are potentially millions and millions of dollars of revaluation that has to happen in the property sector and it’s not going to be pretty. We could end up with suburbs where there is a wholesale collapse in value,” Mallon said.
He said banks should probably lead the charge in addressing the problem − “to sit down with insurers and planners and say, ‘Will you start providing insurance on this?’“
Early next year, Climate Risk will launch an online valuation tool to help users analyse how climate change could impact their property’s value in the future,
SMH reported.
The system analyses climate and coastal data − such as tide, tectonic and wave gauges – to recalculate the value of a property at the end of the mortgage.
“We are not building with climate change in mind… we need someone to start talking about the risks going forward. So we’ve been building these products to be able to do that,” Mallon said.
Related stories:
Delayed but worse bushfire season on the cards for Southern states
‘Insufficient action’ by insurers over climate risk
Is the insurance industry ready for climate change?
Global consulting firm flags climate change impact
