Companies are quantifying the predicted impact of climate change. Use resources to narrow down your property search or to guide renovation plans in coastal locations.
While it’s a polarising topic, climate change can have direct implications for property owners and buyers if you buy in an area that’s vulnerable to rising sea levels or flooding.
Companies including Coastal Risk Australia and Climate Valuation are quantifying climate change impacts on property value by offering interactive tools and climate valuation reports which can pinpoint areas that are under threat.
The Coastal Risk Australia 2100 domain shows the potential impact of climate change and sea level rise on coastal locations throughout Australia including Fremantle, Melbourne, Cairns, Sydney, Port Douglas, and others. The data provided in the tool communicates the risks of sea-level rise and storm surge.
In addition, Climate Valuation is set to provide climate valuation reports for those looking to purchase property in coastal regions. The report indicates the statistical risk of climate change hazards occurring to any property with an adjusted value. It then reports the projected increase in insurance premiums over the term of a home loan.
This helps home buyers avoid unexpected insurance costs or purchasing a de-valuing property. It also allows homeowners to increase value when renovating.
How to use Coastal Risk Australia 2100
Climate Risk 2100 provides climate valuation reports that offer a value impact assessment based on the risk of sea-level rise and flooding associated with climate change.
Using the map, you can pan and zoom to your location of choice. The map will highlight the current high tide flood extent (dark blue) and the future sea level rise scenario for 2100 (light blue). This can help you gauge the potential climate change impact on different areas.
You can also use the high, medium or low sea level rise scenarios to see how the 2100 high tide inundation changes with each setting.
The below map shows that if sea levels rise by 0.54m (set at the medium scenario) by 2100, several coastal regions will be affected including Holloway Beach and Cairns North.Back to top
How to use Climate Valuation
As ‘actions of the sea’ are excluded from many insurance policies, if you purchase a home in a coastal suburb and your property is flooded, you may not be able to lodge an insurance claim. To protect your property, you can take measures to ensure that you do not purchase in an area that is susceptible to extreme climatic conditions.
Climate Valuation reports will be available in late 2016 and they will be approximately $250 per property report.
What’s included in a climate valuation report?
- Risk. The report will highlight the risk per hazard, per year for the duration of the mortgage.
- Cost. It will indicate the average annual cost associated with this risk (e.g. the rise in insurance costs).
- Property value implications. It will estimate the risk cost on the value of the property over the term of the mortgage. Climate Valuation calculates the relative change in property value compared to a similar property that is not exposed to climate change impacts.
Why should I conduct a climate change inspection?
- Informed location choice. Doing some background research and understanding whether a particular location or property is at risk of climate change impacts can not only help you protect your asset but it can also ensure that you don’t buy a property that will depreciate over time.
- Save costs. By undergoing a climate change inspection, you can ensure that you buy a property that won’t be damaged by climate change impacts. You can also save on insurance premium costs.
- Renovation planning. A climate valuation report and research will help you with your renovation plans to minimise the risk of climate change to property value. For instance, you may want to raise the floor if the property is located in a flood zone.