AU - Coastal properties at highest climate risk could fall in value in 18 months
Many city dwellers have made a sea-change during the pandemic, sending property prices in some coastal hotspots soaring.
But coastal properties at the highest risk of climate change impacts could start to fall in value as soon as 18 months from now, an expert has warned.
Over time, beach towns face risks such as coastal erosion, coastal inundation, riverine flooding and even bushfire that could come under the focus of insurers and mortgage lenders, but Climate Valuation chief executive Karl Mallon said major banks are already being asked by their regulator to assess the risks to their businesses from climate change, such as loans to properties at risk of floods.
“At the moment it’s just ‘assess it’, but in the near future they’re going to be asked, ‘What are you doing about this?’” he said.
“And that’s going to make them very hesitant to keep providing mortgages in high-risk areas.
“What we’re saying to homebuyers is they need to think about whether they will continue to be able to get insurance or be able to sell their house in a few years if they’re in a high-risk zone because we think that’s going to get very hard, very quickly.”
Asked if he thought that could hit property prices, Mallon said, “For sure, absolutely, I think within 18 months.