Australian news, and some related international items

$571 billion loss by 2030 estimated for Australian property values due to climate change

Climate change could slash $571b from property values, study warns, ABC, 10 May 19

Key points:

  • The Climate Council estimates Australian real estate will lose $571b, or almost 9pc, of its value by 2030
  • The losses will be concentrated amongst 5-6pc of property owners, with many properties virtually uninsurable
  • The report estimates $4 trillion could be wiped off economic growth over the next 80 years if carbon emissions do not fall

The research estimates residential property value losses of $571 billion by 2030 related to increased extreme weather events, inundation of some low-lying coastal properties and higher insurance premiums.

That would wipe approximately 9 per cent of the nation’s total residential property value — about as much as has been lost so far in the current property downturn, which is on track to be the worst in Australia’s recent history.

However, these losses would not be evenly spread, as an estimated 5-6 per cent of property owners bear the brunt of climate change risks.

As insurance companies reshape their risk strategies to manage extreme weather events, the report predicts, the cost of insuring properties — particularly those on the coast — could become unaffordable for one in 19 owners, who would have to pay annual premiums equivalent to 1 per cent of their property value.

A recent study by the Actuaries Institute — actuaries are the statisticians who calculate risk for insurers — warns that as many as one in 10 properties could become uninsurable by the end of this century due to climate change.

Climate risk expert and report author Karl Mallon warned insurance companies were constantly updating their risk strategies, and could hike premiums to deal with extreme events such as rising sea levels, heatwaves and floods.

“Increasingly, Australians are also going to struggle to pay for home insurance. On current trends, by 2030 one in every 19 property owners faces the prospect of insurance premiums that will be effectively unaffordable,” Dr Mallon said.

Even for Australians who can afford to pay, general insurance currently does not cover damage from coastal inundation and erosion — events which are likely to become more common because of climate change.”

‘There are real costs of failing to act’

The report also warns $4 trillion could be wiped off economic growth over the next 80 years if carbon emissions do not fall.

Climate Council chief executive Amanda McKenzie told The World Today both major parties needed to confront climate change with policies that showed political will……..

The new report, Compound Costs, says coastal areas are likely to be hit hardest, and highly populated areas such as the Sunshine Coast, the Gold Coast and Melbourne are all vulnerable. ……

Climate an election issue…..

The Climate Council research follows warnings from the Reserve Bank and the Australian Prudential Regulation Authority that climate change poses serious economic risks and that companies need to disclose their exposures to investors.

May 11, 2019 - Posted by | AUSTRALIA - NATIONAL, climate change - global warming

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