Author: Greville Pabst, CEO, WBP Property Group

Extreme weather conditions and rising sea levels resulting from global warming could wreak havoc on Australia’s coastal property in the future.

Scientific evidence from the Intergovernmental Panel of Climate Change contends that global warming is resulting in increasingly severe weather patterns and rising sea levels, which will ultimately affect much of the world’s coastal communities.

According to the IPCC’s conservative predications, sea levels could rise more than 40 centimeters by 2100. But while this figure sounds relatively insignificant, a rise of this magnitude represents erosion of coastal shorelines by 40 metres, with startling implications for Australia’s coastal property, infrastructure and tourism.

According to figures, approximately 80% of Australians live in coastal zones, some of which are already vulnerable to changing weather patterns and sea level activity. But what does this mean for future property values for those located in the risk areas?

Fortunately, any affects of rising sea-levels are unlikely to affect most coastal property at all and many not until the end of this century, but for others the affect could be significant and somewhat sooner.

Historically, property located in low-lying or flood prone areas will often suffer from diminished value, a trend which will become increasingly evident as predictions purport the increased occurrence of wild weather patterns. As our shorelines abate waterfront properties affected by rising sea level conditions are likely to respond similarly, particularly as insurance and planning policies become more restrictive.

Yet, even though most home owners and investors have insurance they remain at risk. A property’s value is largely dependant on the value of the land component, which in some instances accounts for up to 70% of the entire value of a property. As coastal land recedes many properties will be inundated with seawater, with land that cannot be insured rendered virtually unusable. Australia’s coastlines house some of the country’s most expensive and highly sought properties, many of which could be affected to the tune of billions of dollars.

Fortunately, Local, State and Federal Governments recognise the genuine threat to Australia’s iconic shorelines and lifestyle. The New South Wales State Government recently introduced new land-use policy and planning to better manage future coastal development, resulting in mixed reactions from stakeholders. The changes to planning policy have meant that many homeowners and developers have been denied building approval. But as is the case for owners of property in flood prone areas, current policy maintains that for existing coastal property the onus of care and prevention remains with the property owner.

As pressure for action builds, similar policy practices are likely to begin to emerge in other states, and, hopefully, with it funding to prevent further erosion of our shorelines and to protect the hundreds of thousands of homes at potential risk from rising seas.

This article was published in the Saturday Herald Sun 3 April 2010.