Study finds properties in flood-prone areas have lost value

ABC NEWS (Australia)

The climate council's Ben McLeod is a co-author of the report. He says the findings are a warning about the impact of significant floods in the future.

Transcript

00:00What this report has done is looked at about 20 years or more of property price value,

00:06and it goes down to individual homes in Australia to understand what the factors are that are

00:11impacting property prices. So we would expect that maybe the number of bedrooms or the number

00:15of bathrooms is a relevant variable. But what this model did is it added flood risk to that

00:20question. And what we found is that when we added flood risk, it explained about a $42 billion loss

00:26in value. And that's really concerning because we know that more climate pollution is fueling more

00:31frequent and severe flooding events. And it is really a warning sign for what could be to come

00:36as climate change worsens over time. Certainly, flood risk is impacting property values in all

00:43sorts of areas. Some of the highest hit areas are actually areas with expensive properties. But we're

00:50also seeing in some areas where waterfront homes may even have a slightly higher value despite being

00:57at flood risk, because owners are looking for that waterfront property amenity. But that is a risk

01:03because those properties are still at value of a flood. And if that flood were to occur, we would

01:08potentially expect to see that that value penalty start to shave some value off the price of that

01:15property. Something that could be really essential going forward is to have a really consistent and

01:20clear way for buyers to find out whether their properties are at risk of flood or could become

01:25at risk of flood in the future as we experience global heating and as climate pollution drives more

01:30severe disasters. And at the moment, really, it's quite hard for buyers to understand what they're getting into.

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