Home Insights Serious Threat Of Climate Change To Australia’s Housing Market Revealed

Serious Threat Of Climate Change To Australia’s Housing Market Revealed

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Climate change poses significant risks to the housing market. According to new data, the highest risk areas are populated by Australians who cannot afford it.

After nine years of policy failure, voters across the country must speak loudly and clearly and Canberra must take ambitious action against climate change in the midst of remarkable changes. And Australia, one of the world’s largest per capita carbon emitters, may now be on the verge of a turnaround.

Once a liberal base, the seats are now held by independent members of Tyr and are firmly focused on climate change initiatives and more.

Australia, the driest continent on earth and home to delicate ecosystems such as the Great Barrier Reef, has already been affected by climate change exacerbations such as bushfire, drought, sea level rise and flood disasters. .. Not surprisingly, many voters brought it to ballots, in the midst of remarkable changes, with the message that it was time for ambitious action on climate change.

The results of the election show that Australians want to take urgent action against climate change.Photo: Getty


An analysis by leading climate risk analyst Climate Valuation found that one-twentieth of Australia’s homes could be uninsured by 2030.

Following that alarming report, a study led by the World Meteorological Organization found that the threat of global warming was accelerating. Currently, the world is 50% likely to exceed the 1.5 degrees Celsius warming threshold over the next five years.

According to the report, it is “almost certain” that the year 2022-2026 will be the hottest on record.

Experts have identified that 1.5 degrees Celsius above pre-industrial levels has catastrophic consequences. This is the upper limit set by the 2015 Paris Agreement to avoid the increasingly harmful effects of climate change.

When we look at the risks of a momentary course between cause and effect, we act swiftly – COVID-19 over the last two years is a classic example of this.The unfortunate reality is that When it comes to climate change, the delay between cause and effect fills the urgency and incentive to correct.

Maintained throughout history by high commodity prices, Canberra has an enviable job in climate adaptation. The new Australian Government needs to implement appropriate risk mitigation strategies and take advantage of opportunities for change. Currently, Labor’s climate agenda is reasonably ambitious than that of the coalition. Their plan to reduce emissions by 40% over the last decade still leaves Australia with per capita emissions, surpassing Russia and most EU member states.

Climate change has already had quantifiable socio-economic impacts, leaving few communities on Earth untouched. Australia is no exception.

It is already estimated that the earth has warmed to 1.1 degrees Celsius, increasing the incidence of wildfires and floods and generating deadly heat waves. However, the temperature distribution is distorted, with seemingly small shifts (+ 1.1 ° C) obscuring the reality of this change, with extreme frequency and magnitude over the last few decades. Now the average day is warmer (the average shifts to the right) and the chances of a very hot day are high (thick tail).

The number of hot days is increasing.Photo: Getty


Climate risk from real estate market lenses

These extreme weather events are set to increase in frequency as the Earth warms.

Climate change is, first and foremost, a threat to existence that is estimated to be costly to a wide range.A small part of the threat brings Substantial physical, responsible and migration risks to buildings, homeowners and real estate investors as climate change causes inevitable turmoil..

Risks vary widely from country to country, but focus on a key focus.

  • Physical risk and property damage
  • Insurance accessibility
  • Asset performance and value
  • Asset design / building code

Climate change = insurance risk

This shows that the increase in climate-related losses threatens the viability of the insurer’s portfolio, and in certain regions, if you take that risk and price it, some compensation will be completely denied. May be done.

For the purpose of quantifying physical risk, “high risk” homes are categorized as having an annual damage cost due to climate change and extreme weather equivalent to more than 1% of the cost of replacing the property. Premiums are expected to be too high for people to get, and they will not be able to access insurance, so they are considered virtually uninsured.


Victoria, Queensland and New South Wales are estimated to be home to the most risky regions by 2030, and Queensland is expected to be the most “uninsured” state in the country by 2030. It has been.

By 2030, more than a quarter (27%) of properties will be in the “high risk” category, according to Nichols voters. In Richmond, 20% of properties are considered “high risk”, but that number will increase. If global warming is not controlled, it will be more than one-third by 2100.

According to the Climate Council, river flood risk is the number one concern, and because of the high potential and impact of river floods, nearly 80% of the top 10 voters at the highest risk are “high risk” properties. It is classified as. Wildfires and surface floods are other major hazards affecting the “high risk” characteristics of 2030.

The analysis also details that of the estimated 3 million real estate affected by floods, one-third are in 30 municipalities.

Not only are these risks serious and increasing, they can propagate non-linearly, causing sudden knock-on effects and feedback loops.

Understanding these risks is essential for all current and future homeowners.

Australia has experienced extreme natural disasters in recent years.Photo: Getty


The most endangered people have the least room to buy it

The effects of climate change, called the “eco-social crisis,” are usually greatest across the most vulnerable social sectors.

Again, Australia is no exception. According to the latest available census data, median weekly household income tends to be lower in areas where the proportion of at-risk properties is high.

This raises serious questions about public policy regarding risk mitigation or adaptation.

Mitigation efforts or housing to be more resilient to the potentially exorbitant future costs of premiums and the impacts on the climate (here and set to accelerate). There is an urgent need to deal with the burden of funding the refurbishment.

Australians are interested in sustainability when it comes to homes

According to data from realestate.com.au, many want a more environmentally friendly home choice.

Search data at realestate.com.au shows that many people are searching for sustainable features.

Solar panels are the number one keyword used by those looking for real estate looking for the sustainability features of their home.

Solar power accounts for more than 90% of the energy efficient keywords used in searches, but the second most popular search term is energy efficiency.

Also showed the latest realestate.com.au home consumer omnibus survey 74% of people looking for real estate believe that energy efficiency assessments are important when buying, building or renting...

However, the main reason is the reduction in energy consumption.

Studies also show that solar power, energy-efficient lighting, insulation quality, and airflow are top priorities.

Climate risk is an investment risk

Climate risk is an investment risk, and some Australians are familiar with this concept. Over the next few years, real estate seekers will be more cautious about location and insurance physical risks as well as design criteria and sustainable features, and will increasingly apply climate filters to decision making. ..

When describing a larger range of extreme climates, design standards and building materials need to guarantee the future in order to withstand that variability. Building more elastic homes and promoting decarbonization of real estate can increase construction costs.

These factors can affect price performance and valuation based on the risk profile and characteristics of individual properties.

The deadly and devastating summer wildfires of 2020/21 have sparked a new call for meaningful action on climate change.Photo: Getty


From climate change to leaders?

With proper policy setting, Australia has the opportunity to make significant contributions to the decarbonization agenda, yet it is possible to achieve climate resilience.

But we have to do more.

Before the election, the voting compass data was fixed Climate change the The biggest problem for voters..

Australia, the largest fossil fuel exporter after Russia and Saudi Arabia, which have the highest per capita emissions of the G20, now has a goal of achieving net zero emissions by 2050.

Having relied on these export revenues for a long time, so far workers have not yet promised to phase out domestic use of coal, oil and gas or limit exports. Hmm.

There is no actual plan for decarbonization or system-wide adaptation and implementation required to achieve higher goals. A target that has become an important pillar of Western loyalty.

In a world competing for net zero, ambition not only promotes national interests, but also promotes a prosperous future.

In the near future, a huge number of Australian homes may become uninsured.Photo: Getty


Note

The referenced survey was conducted by Climate Valuation, a company that provides climate risk analysis to real estate owners.

The Interactive map of the climate council Readers can view data on risks under various greenhouse gas emission scenarios to suburbs, constituencies, or municipalities in 2030, 2050, and 2100. Floods, bushfires and extreme winds.

Homeowners have access to data that banks, governments, and insurance companies already have. Climate assessment Homeowners bring sophisticated climate modeling and data to their homes for the first time to gain access to the types of analysis used by insurance companies and banks to understand current and future climate vulnerabilities to extreme weather events in their homes and regions. I can do it.

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