Half a trillion dollars could be wiped off the value of Australia’s property market by 2030 as a result of climate change, according to a grim new report.
And it won’t just be households in high-risk areas bearing the brunt of climate change, with some of Australia’s most affluent beach and harbourside locations identified as “primary hotspots” at risk of sea level rise, storm surges and extreme weather events.
A new risk assessment on the effects of climate change in Australia warns the impacts are already being felt by “every part” of society.
The National Climate Risk Assessment (NCRA), released by the government on Monday, has modelled the risks and impacts under three scenarios; 1.5ºC, 2ºC, and 3ºC of warming above pre-industrial levels.
Current estimates put the world on track for a temperature rise of 2.9ºC this century, according to the UN environment programme.
Inner Sydney suburbs have been identified as primary hotspots for climate change risks. Picture: Getty
The report warns extreme weather events including heatwaves, tropical cyclones, bushfires and severe floods will becomes more frequent and have direct impacts on homes, businesses and infrastructure.
Other flow on effects include reduced workforce and labour productivity as a result of heatwaves as well as escalating insurance premiums – or more uninsurable homes in high-risk areas.
Climate change and energy minister Chris Bowen said the report finds that no Australian community will be immune from climate risks.
“One thing that is very clear from this climate assessment is that our whole country has a lot at stake,” Mr Bowen said.
Chris Bowen has released a damning new report on the impact of climate change. Picture: AAP Image/Joel Carrett
Under a worst-case scenario, the impact of extreme weather events is estimated to hit property values by $571 billion by 2030, $611 billion by 2050 and $770 billion by the end of the century.
“These impacts, as well as disruptions in supply chains and increased prices for essential goods, will contribute to the cost of living, placing further strains on household budgets,” the report said.
The inner-city locations at risk
While households in the Northern Territory, Queensland north and Western Australia north have been identified as most exposed to extreme heatwaves, floods, storms and bushfires, inner-city residents have also been put on notice.
It found major urban centres and cities across coastal areas are primary hotspots at risk of sea level rise and increasing coastal hazards.
Glitzy Sydney suburbs increasingly exposed to sea level rise include Double Bay, Millers Point and Darling Point, along with inner-city Darlinghurst and Haymarket and bayside Kogarah in the city’s south.
“Expanding coastal urban suburbs and waterfront developments will increase future impacts from sea level rise, storm surges and extreme weather events,” the report found.
Millers Point on shore of Sydney Harbour at The Rocks has been identified as a location at risk of climate change. Picture: Getty
Suburbs in the east, west and north of Melbourne’s central business district were also identified as climate risk hotspots.
Sea level rise along the Victorian coastline is projected to be around 13 cm by 2030 and up to 42 cm by 2070.
Nationally, rising sea levels – projected to reach up to 50cm by 2050 and over 80cm by 2090 – are expected to significantly affect multiple states, particularly along Australia’s east coast.
The total value of Australia's residential housing market rose by $213.8 billion to $11.6 trillion this quarter, according to the Australian Bureau of Statistics.
Of the nation's 11.4 million dwellings, the climate report estimates 8.2% – or 751,000 homes – are currently located in high-risk areas, while 794,000 are in very high-risk areas.
By 2090, the number of homes in very high-risk areas will rise to 1.2 million.
Locations at-risk considers exposure to floods, bushfires, tropical cyclones and heatwaves.
Outer urban areas of cities were identified as "watchpoints" due to factors such as location, demographics and proneness to hazards, “making them particularly susceptible to adverse impacts” and “likely to experience prolonged recovery times”.
Coastal community ‘watchpoints’
73% of Australia’s population live in major cities, particularly along the east coast.
By 2050, the number of coastal communities located in high- and very-high risk areas nationally is expected to rise by to more than 1.5 million people, and more than 3 million by 2090.
“The relatively high values of assets at risk increase the impacts if risks are realised,” the report found, pointing to sea level rise and coastal flooding.
“They are also at risk from legacy planning decisions that did not include adequate sea level rise considerations, which will now increase the vulnerability of settlements.”
There were warnings for areas with residential buildings in close proximity to soft shorelines. Picture: Getty
The high population density in coastal areas, location of residential buildings near soft shorelines, and value of real estate investments all increases risk.
Communities located within 10km of soft shorelines will be especially vulnerable to erosion, inundation, and infrastructure damage.
Out of 700 coastal communities in the study, the percentage at high- and very high-risk is projected to increase from 8% in 2030 to 18% by 2050, and 34% by the end of the century.
Coastal areas may be at risk from legacy planning decisions that did not include adequate sea level rise considerations. Picture: Getty
The report warned heat-related deaths could increase by up to 444% in Sydney and 423% in Darwin under the +3 degree scenario.
It comes as the Albanese government prepares to release a new 2035 climate target, likely this week.
The Opposition says it will examine the assumptions behind the report following a briefing with the Australian Climate Service.
"Any target must pass two simple tests: it must be credible, and it must be upfront about the cost to households and small businesses," opposition leader Sussan Ley and acting shadow minister for energy and emissions Ted O'Brien said in a joint statement.
Households concerned about financial impact of climate change
The sobering report lays bare the impact of extreme weather events, rising sea levels and disruptions to ecosystems as a result of climate change.
But when it comes to current concerns about climate change impacts, a recent report by PropTrack shows most consumers are feeling it at the hip pocket.
Insights from the realestate.com.au Residential Audience Pulse Survey conducted in January 2025 found the vast majority (87%) of respondents are concerned (slightly, very or extremely) about rising energy bills due to climate change.
Consumers are concerned about the impact of climate change on their hip pocket. Picture: Getty
Other top concerns include biodiversity loss (81%), water shortages (79%), home safety risks (75%), and lifestyle changes (68%).
“2024 was the hottest year on record, with greenhouse gas emissions reaching an alltime high, underscoring the urgent need for climate action, ” PropTrack senior economist Eleanor Creagh said.
“The findings reveal that while climate concerns are a priority, financial motivations drive most energy decisions.”
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