The apartments and houses in which Australians live will be at risk as climate change intensifies. A combination of more intense storms, more frequent bushfires and higher sea levels will not only threaten housing directly, it will also make homes more expensive to insure, to maintain, and to keep cool. And as Australians settle in increasing numbers near the coast and in the hotter outer suburbs of our major cities, their vulnerability will increase.

Across all Australian settlements, increasingly severe extreme weather events will impose the highest direct costs to householders. Natural disasters already cause more than $1.14 billion damage each year to homes, businesses and the nation's infrastructure, along with serious disruptions to communities.


Extreme Weather and Coastal Communities
The increasing intensity, and possibly frequency, of extreme weather events is a major threat to Australian housing. The Sydney hailstorm of 1999 was Australia's most expensive natural disaster, causing at least $1.7b in insured losses. In 2005, storms in NSW and Victoria cost at least $215m, while Cyclone Larry in 2006 is likely to cost in excess of $200m. While these storms cannot be directly attributed to climate change, they are consistent with predictions of some increase in storm severity in temperate latitudes, and significant increases in severity in tropical and subtropical areas.

Around 80% of Australia's population resides within 50 km of the coast, and population growth and investment in these areas is increasing. Between 1991 and 1996, 25% of Australia's population growth occurred within 3km of the coastline, predominantly in Northern NSW, Southern Queensland and southern Perth. Thus an increasing proportion of Australian housing will be exposed to changes to coastal climate, including more intense and widely spread tropical cyclones, storm surges and flooding.

Beachfront housing, in particular, will come under threat from rising sea levels, which the Intergovernmental Panel on Climate Change (IPCC) predicts will rise by between 9 and 88 centimetres per decade over the course of the century. The CSIRO forecasts that beaches will be eroded by between 50 and 100 times the vertical rise in sea level, i.e. between 4.5m and 88m by 2100.


Bushfire risk
A hotter and drier climate will intensify the bushfire risk faced by many Australian suburbs. The recent 2002-03-fire season illustrates the magnitude of the threat, with over three million hectares of bushland and vegetation destroyed across the country. The months preceding the fires where characterised by severe drought, abnormally low humidity and high daytime temperatures - all of which are likely to increase, albeit unevenly, as the climate warms. Seven people died in the fires, 400 were injured and 629 homes were lost.

The CSIRO forecasts that climate change could increase the number of very high and extreme fire weather days by between 4-25 percent by 2020 and 15-70 percent by 2050 across parts of south eastern Australia. The changes would be greatest in the inland and relatively less along the coast and in Tasmania. According to a CANA report: "fire as a result of climate change will continue to occur more regularly, causing serious and irreversible damage to national parks, forests and private property."

The costs of adapting to climate change for householders will include greater expenditure on insurance, and measures such as insulation and air conditioning. Many Australians may not be able to easily meet these costs. As Clive Hamilton, of the Australia Institute observes:

"the key distributional issue governing private financial costs relates to the variation in ability to pay for climate proofing of homes. Clearly wealthier households will be in a better position to protect themselves from the effects of warming and extreme weather events. Poorer households will tend to invest in less effective measures or simply to suffer the consequences."

Even large companies may face serious problems adapting to the financial costs imposed by climate change. As the Allen Consulting Group notes, governments may have to:

"consider the issues around the distribution of losses in the community arising from the possibility of either a withdrawal of insurance from covering some risks, a huge increase in costs, or the failure of one or more major companies."