The resilience of Australians has been tested in recent weeks with heavy rainfall and flooding - just the latest in a series of weather events that have had disastrous impacts on people's homes and livelihoods in the past few years.
The La Niña weather system continues to wreak havoc across Australia, with meteorologists expecting heavy rainfall until mid-November. Some relief is in sight, with expectations that by the end of Spring, La Niña will develop into neutral El Niño - Southern Oscillation (ENSO) conditions throughout the upcoming summer.
But even as La Niña eases, the last couple of years have proven that weather events can be wildly unpredictable, and we must live with changing weather patterns. This will have consequences on where we live, which property we buy/invest in, and even how we get financing.
As concerns rise that the frequency and level of impact felt by these weather events will escalate, it is starting to affect real estate. Potential buyers are becoming savvier about where they buy homes, seeking information about flood risks.
A recent report by the United States real estate brokerage Redfin found that when potential buyers were confronted with the information that a house has a 9 out of 10 flood risk score, they changed their search terms to avoid flood risk.
While it is a US study, behaviours locally here in Australia will be similar. Dr Trivess Moore, a senior lecturer in RMIT's School of Property, Construction and Project Management, explained: "We are going to see increasing extreme weather events moving forward, and the housing industry and individuals are not prepared for that at all."
"Homeowners are spending the most money they are ever going to spend on an asset that could potentially have significant issues."
In New South Wales, real estate agents must tell prospective buyers about any flood damage caused in the past five years, while in Victoria, sellers must report whether a house for sale has experienced flooding or is in a bushfire zone.
Meanwhile, in Queensland, the state government is currently consulting stakeholders on whether they should make flood information a mandatory disclosure by anyone selling property.
Searching flood maps is a widespread practice in Queensland and has been since the 1974 floods. The Brisbane City Council has recently launched its Flood Information Online search tool, which allows users to view houses affected by earlier flooding events.
In Victoria, there has not been a recent history of major flooding events. The Planning Institute of Australia's Victorian division vice president, Jane Keddie, has cited concern that current flood mapping in Victoria is up to 20 years old. Victorian planners are dealing with a patchwork of databases and maps that have been gathered and applied inconsistently by local councils and water authorities, which are reluctant to highlight the flood risks a property may face.
"It would be naive to think that politics is not entwined in some of the issues around how we respond to manage to flood," she said. "There are difficult conversations to be had about where we accommodate growth. There will certainly be effects on property values."
If you are looking for flood mapping in Victoria, the SES has a database of flood maps available based on local council information.
Just as potential buyers are becoming more aware of the impact of potential flooding on homes, insurers and banks are starting to factor this information into the prices of premiums and how much money they are willing to lend to owners in impacted areas.
Earlier this year, the Commonwealth Bank released its first Climate Report, reporting that it had completed a climate scenario analysis covering 74 per cent of its exposures. The Commonwealth Bank (CBA) says that the findings from this analysis will help inform its strategy, lending decisions, and product and service development.
The report noted that $31 billion of CBA's Australian home loans, which equates to approximately three per cent of its exposures, are vulnerable to natural catastrophes, such as floods, cyclones, or fires.
The summer months in Australia are our flood and fire seasons, so ensure you prepare for emergency scenarios. The National Seniors Insurance team has several helpful guides on how to protect yourself and your property both before and after a major incident. The guides cover floods, bushfires, storms, and earthquakes (they are more common than you realise).
