Australia’s housing market is still booming in many disaster-prone regions, even as a new federal report warns climate change could slash property values by hundreds of billions of dollars, the Daily Mail UK reported.
According to the paper, the National Climate Risk Assessment – the government’s first nationwide review of exposure to extreme weather – estimates that worsening bushfires, floods, storms, and rising sea levels could directly endanger more than 1.5 million Australians. By 2050, over 1 million homes are expected to fall into “very high-risk” zones, potentially stripping up to $600 billion in value and leaving properties uninsurable.
Despite the scale of the threat, Daily Mail UK said recent data shows buyers remain eager to purchase in exposed areas. Ray White research covering 64 high-risk suburbs found that 58% recorded annual growth averaging 5.8%, broadly in line with national housing trends.
Some of the sharpest increases were seen in South Australia’s Adelaide Hills, where nearly every home faces extreme bushfire risk. Suburbs such as Stirling, Heathfield, Crafers West, and Aldgate posted rises of up to 12.5%, with median values exceeding $1.3 million.
The report added that strong returns were also recorded in coastal regions. Cotality data showed seller profits in the June quarter were highest in areas including Kiama, Byron Shire, Cottesloe, Surf Coast, and several Sydney councils such as Waverley, Northern Beaches, and Woollahra, with median gains ranging from $575,000 to $758,000.
Federal MP for Wentworth Allegra Spender told the Daily Mail UK that parts of her electorate had been singled out in the assessment.
“The suburbs of Darlinghurst, Double Bay, and Darling Point are specifically identified in this report as particularly vulnerable to rising sea levels. We have to take strong action now to create a safer future for all Australians,” Spender said.
Ray White chief economist Nerida Conisbee told realestate.com.au that lifestyle appeal continues to outweigh long-term risk: “For many buyers, the appeal of scenic locations and premium amenities outweighs the long-term dangers of climate exposure.”
Even so, 42% of high-risk suburbs recorded price falls, particularly in lower-value coastal towns and some prestige markets affected by bushfires and floods. The Daily Mail UK reported that insurers have already withdrawn from some regions, leaving homeowners with properties that are uninsurable, unfinanceable, and difficult to sell. Analysts warn the tipping point may come if banks and regulators impose tougher lending rules or building codes as extreme weather intensifies.
