Northern Beaches Mums Group
Northern Beaches Mums Group

$25 billion of Australia’s residential property is exposed to high coastal risk

Leading data and analytics company CoreLogic has estimated that the increasing storm surges and coastal erosion have the potential to impact $25 billion worth of Australian residential coastal property. This includes two of our local suburbs with Manly and Collaroy both being named.

These findings utilise a new proprietary Coastal Risk Score, which measures the potential impact of climate change over time.

The damage caused by recent weather events in southeast QLD and NSW was a tragic but timely reminder of the untold devastation extreme weather events can have on people and property. 

The Coastal Risk Score would inform homeowners, future buyers, and financial services sectors, such as insurers and lenders, of potential future climate-related coastal risks. Coastal risk has far-reaching implications for the country’s property market and its supporting financial sector, including property valuations, home loan viability and insurance premiums.

The impact of climate change on Australia’s coastal erosion and rising sea levels is alarming and needs urgent attention. Understanding the coastal risk associated with these properties is important to every owner, potential buyer and property and the financial sector that are supporting the expansion of new coastal properties.

Credit risk and long-term loans are impacted by these natural trends. Also, any financial institution needs to evaluate the potential downturn in property values or the concentration of a portfolio at risk. Furthermore, this risk is adding pressure on insurance.

CoreLogic’s proprietary Coastal Risk Score places properties in one of five categories – no risk, low risk, medium risk, high risk and very high risk. 

Dwellings categorised as very high risk may be impacted by coastal retreat within the next 30 years and may also be at a very high risk of significant storm surge impact. 

More than 900,000 dwellings are identified as falling into one of the four at-risk categories with 12,694 houses and 9,441 units categorised as being at high risk or very high risk of coastal exposure. The value of these properties is $5.3 billion and $19.6 billion respectively.

Out of the top 10 suburbs around Australia with the most value at risk, Paradise Point on the Gold Coast has the highest volume of detached houses most vulnerable. Manly and Collaroy also ranked high due to the high residential apartment value and density of apartment dwellings within proximity to the coastline. 

Whilst this is potentially surprising or even confronting information for homeowners, it is important data that will allow consumers to make the best property decisions and help them plan for long-term wealth preservation.

Would it put your off buying in Manly and Collaroy?

Source: CoreLogic, March 2022

Louisa Sanghera is a Finance Broker for Residential Mortgages, Vehicle and Asset Finance, Commercial Lending and Budgeting and Cashflow Coaching with Zippy Financial.

She has gained more than 30 years in the Banking and Finance Industry, and since founding Zippy Financial, has become a multi award-nominated expert in the field of finance featuring regularly in industry press and speaking at finance and investment seminars across the country.

Phone: 1300 855 022