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Climate Change and the Housing Market: How Rising Temperatures Drive Up Prices

Climate change is no longer a distant threat; it’s here and impacting every aspect of our lives, including where we live and how much it costs. While the link between climate change and the housing market may not be immediately obvious, the effects of rising temperatures and extreme weather events are becoming increasingly evident in property prices, insurance costs, and housing demand.

The Rising Costs of Housing

One of the most direct impacts of climate change on the housing market is the increase in property prices. As extreme weather events such as floods, bushfires, and cyclones become more frequent and severe, the demand for housing in safer, less vulnerable areas rises. This increased demand drives up property prices in these areas, making it more expensive for people to buy homes.

Research conducted by the Climate Council of Australia has shown that properties in high-risk areas are losing value, while those in safer regions are appreciating at a faster rate. Homebuyers are becoming more aware of the risks associated with climate change and are willing to pay a premium for homes that are less likely to be affected by extreme weather events.

Increased Hazards Putting Communities in Danger

Poor planning frameworks and fossil fuel driven climate disasters such as floods and cyclones are putting our communities at risk. To adequately prepare for the hazards we are facing, we need more than just an emergency kit and evacuation strategy. We require proactive measures from our local governments to adapt and enhance our towns and communities' resilience to the impacts of extreme weather events.

Given the scale of the task ahead, Federal, State and Local governments will need to work collaboratively to keep Queenslanders safe from extreme weather events. The first important step is ensuring our local governments are properly resourced to develop the skills and programs to effectively plan and implement the required changes for Queensland to adapt and become resilient.

Programs such as the QCoast 2100 Program which assists local council with coastal hazards and adaptation strategies and the Queensland Climate Resilient Councils Program which aims to deliver services and products that will strengthen staff and leadership team skills and capacity to plan for and respond to the challenges and opportunities arising from climate change are great proactive steps that need to be built upon. These measures are critical in building the resilience of our communities and ensuring a safer, more sustainable future for all Queenslanders.


Insurance Costs on the Rise

Another significant factor driving up the cost of housing is the increase in insurance premiums. As climate change intensifies, insurance companies are facing higher payouts for damages caused by natural disasters. To offset these costs, they are raising premiums, particularly in areas prone to extreme weather.

A report by the Australian Competition and Consumer Commission (ACCC) revealed that home insurance premiums in northern Australia, a region highly susceptible to cyclones and floods, have increased by an average of 130% over the past decade. This sharp rise in insurance costs makes homeownership more expensive and can even render some homes uninsurable, effectively reducing their market value.


The Ripple Effect on Housing Demand

As insurance costs and property prices rise in high-risk areas, more people are looking to relocate to regions perceived as safer. This shift in housing demand not only drives up prices in these areas but also leads to increased development pressure on previously less populated regions. In turn, this can strain local infrastructure and resources, leading to higher costs for utilities and services, which further contributes to the overall increase in housing costs.

The Grattan Institute’s research highlights that urban sprawl and the push towards developing new areas can have significant environmental impacts, including the destruction of natural habitats and increased carbon emissions. This highlights the need for sustainable development practices and better urban planning to accommodate the shifting population without exacerbating climate change.

You can make a difference

The impacts of climate change on the housing market are just one piece of the broader environmental puzzle. Addressing these challenges requires a concerted effort from individuals, communities, and policymakers alike.

At Mackay Conservation Group, we are committed to protecting our beautiful region and the planet we all live on. But we can’t do it alone—we need your help. Your support is crucial in our fight against new coal mines and in advocating for sustainable development practices.

You have the power to make a difference. 

Your tax-deductible donation can fuel our efforts to safeguard our natural environment for future generations. Just a small monthly gift can have a significant impact.

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  • Administrator Mackay Conservation Group
    published this page in Blog 2024-06-17 12:28:31 +1000