$25 billion in Australian coastal property at risk due to climate change

By Evlin DuBose · · 2 min read
Fact Checked
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A giant wave bursts over a storm levy.

Remember when the Sydney Harbour went brown after flooding? Aesthetics may be only a hint of the impending disaster. 

According to a report from Corelogic, erosion, storm surges, and climate change will jeopardise nearly $25 billion in Australian residential coastal property. Rapidly rising Australian sea levels only worsen the problem, which is poised to endanger nearly 20,000 coastal homes over the next three decades. 

These natural trends will have far-reaching consequences for a property market still hot from the 2021 boom, particularly for home loans and home insurance premiums/coverage, which are already experiencing upward pressure due to an impending RBA cash rate rise and intense flooding on the east coast. 

Buyers hoping for seaside homes should therefore take coastal risks into account when comparing potential mortgages repayments and insurance policies.

Risks of buying coastal property in Australia

The Sydney harbour-side skyline at blue hour.
Photo by Daniel Chen.

Coastal risk typically accounts for events such as:

  • Erosion
  • Storm surges
  • Rising sea levels. 

Erosion (also known as shoreline retreat) endangers properties due landslides and bedrock removal either over short or long periods of time. Storm surges, currents, winds, and elevated tides can all directly affect coastal erosion – and will inevitably get worse as the sea level rises and the weather becomes more erratic due to climate change.

Corelogic’s report categorises Australian properties into five different levels of risk, from no risk to very high risk. Of the over 900,000 dwellings categorised in the report, 20,000 fell into the highest risk categories due to their coastal exposure (including nearly 12,700 houses and 9,400 units). 

The report shows that Queensland bears the brunt of properties at risk, mostly due to the Sunshine and Gold Coast’s densely populated coastlines. New South Wales, Tasmania, and South Australia were close behind, however.

Suburbs experiencing the greatest coastal risk include Paradise Point in Queensland; Cronulla and Manly in Sydney, NSW; and Port Melbourne in Victoria.

A table of the 10 highest risk coastal suburbs in Australia.
Source: Corelogic.

These suburbs usually had a combination of high dwelling density, high value, high erosion, low elevation, and close proximity to the coastline. 

This can come as worrying news for recent homeowners and investors, especially as a pandemic-driven shift to working from home led to a regional and coastal property boom. The aggravated coastal risk may yet be one of many climate change-related effects driving up the costs of housing, including mortgage repayments and home insurance premiums. 

So while that dream home might have incredible seaside vistas and lifestyle appeal, the report author Dr. Pierre Wiart advises that taking coastal risks into account will help consumers make informed purchasing decisions. 

“With the tangible effects of climate change already being felt in most parts of Australia,” he concludes, “this important data will allow consumers to make the best property decisions, and help them plan for long-term wealth preservation.”

RELATED: Feeling helpless about climate change? Here's what you can do (to save money, too!)

In the market for a home loan? Compare options below, or browse a curated list of green home loans to save the environment.

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