- New tool enables Australian buyers and homeowners to assess a property's climate risk
- The portal, owned by Climate Valuation, can generate a property-specific report which includes risk level and potential damage costs
- A further one million homes will become classified high risk by 2050, creating need for climate risk assessments to become commonplace
Whether it’s fire, flood, or drought, Australians are more than familiar with our nation’s unpredictable climate and extreme weather events.
As climate-related impacts are having a increasing effect on residential property values and associated insurance costs, it’s unsurprising Australians are becoming wary of purchasing in certain areas.
Findings from the Climate Valuation Property Risk Portal, released by Climate Valuation, indicate that the issue is set to worsen.
The report predicts that the number of properties deemed to be at moderate to high risk of climate impacts will increase from 1.6 million to 2.6 million by 2050.
Climate change is also expected to result in significant changes to home insurance affordability, with technical insurance premiums anticipated to rise by an average of 70% in high risk areas.
New tool giving power back to buyers
While this outlook may seem bleak, a new tool introduced by Climate Valuation will help Australians assess a property’s climate risk and make informed purchase decisions.
For the first time, the portal will enable buyers to generate a tailored property-specific report, which will detail the likelihood of climate impacts.
Climate Valuation CEO Dr Karl Mallon said the portal is an essential tool for buyers and homeowners to assess the possibility of climate-related incidents and how their asset’s value may be impacted.
He added that he believes climate risk assessments should become commonplace when purchasing a house, just as building and pest reports are.
“It’s the type of due diligence check we expect homeowners, lenders and possibly even regulators will consider a norm in the coming years.”
Dr Karl Mallon, Climate Valuation CEO
Dr Mallon urges prospective buyers to look beyond immediate market concerns, and see the bigger picture when it comes to long-term climate impacts.
“It’s important that people consider the availability and cost of insurance and the possible effect of climate hazards on market value by the end of their mortgage term. These factors will affect the future saleability and appeal of a home,” he said.
The publicly available Climate Valuation portal provides information on the maximum value of risk and cost of potential damages for every Australian suburb, and identifies risky areas.
A tailored report providing asset-specific insight can also be purchased through the portal.
According to Climate Valuation, buyers and homeowners are already taking advantage of the tool to guide their decisions.
Western Australian homebuyer Julia had been looking to purchase a home in Fremantle, however after receiving the risk report, chose a home a few blocks away with a higher elevation and lower flood risk.
“When purchasing a home that I intend to live in for the next 30-50 years, knowing the long-term future risks that will impact the investment is really important.
“I hope councils, banks and real-estate agents start to provide this type of information; I think that it’s critical for people to know the potential for climate risk to guide their decision,” she concluded.
