Strengthening the National Construction Code to require that new homes are made more resilient to extreme weather could save an estimated $4 billion a year, a new report released today by the Insurance Council of Australia (ICA) has found.
The warns that extreme weather costs to homeowners will double by 2050, as events become more severe or more frequent because of climate change.
It found strengthening the National Construction Code (NCC) to require that new homes are made more resilient to extreme weather could reduce average annual building costs by an estimated $2 billion per year for cyclones, $1.475 billion per year for floods, and $486 million per year for bushfires.
The report found there are clear economic benefits in making homes more resilient to bushfires, cyclones, and floods, highlighting the need for greater action to future proof Australia's resilience to extreme weather.
The report also calls for states and territories to reform planning rules to prevent new homes from being built in high-risk areas of the floodplain.
The report supports the Insurance Council's ongoing and long-term advocacy to make properties more resilient to worsening extreme weather and reform land use planning to stop further development in flood-prone locations.
Analysis undertaken by the McKell Institute for the Insurance Council in 2022 found that economy-wide costs from extreme weather events are expected to grow by five per cent each year (before inflation) and reach a total of $35 billion annually (in 2022 dollars) by 2050.
Comment attributable to Andrew Hall, CEO Insurance Council of Australia:
This new analysis by CIE highlights the economic benefit and opportunity of strengthening the resilience of new homes in the face of worsening extreme weather.
Currently, minimum building standards in Australia are designed to preserve life in a catastrophic event - but they are not designed with the goal of preserving the property itself.
As a result, our homes are not built to withstand the extreme weather events of today, let alone the future.
We need to make our homes more resilient, and we need to avoid building new homes in vulnerable areas.
We welcome the renewed focus on resilience by the Australian Building Code Board, which sees strengthening our construction code as a critical solution to ensuring new homes withstand damage from floods, fires and cyclones.
