Topics: housing market, climate change, natural disasters, interest rates, economy
“Into the future, the Australian housing market will be more volatile compared to a decade of long steady growth after the Global Financial Crisis 2008 (GFC) due to climate change disasters.”
“The Australian housing market is already experiencing its most volatile period since the beginning of this century, with many predictions falling flat on the accuracy, primarily due to the emergence of new drivers in the housing market due to the natural and man-made disasters.”
“As we face ongoing climate change challenges, the distinction between Black Swan Events (global events that are so rare that normal economic models cannot predict them) and structural change (dramatic shifts in the way a country, industry, or market operates) continues to narrow due to the increased frequency of artificial and natural disasters.”
“It is anticipated that Australia will be witnessing more unconventional monetary policies like quantitative easing being deployed to weather the adversary economic impacts brought about by both artificial and natural disasters in the future.”
“About one in 25 Australian homes are at high risk of becoming effectively uninsurable by 2030, according to a new Climate Council report based on analysis by a climate risk assessment group (ABC, 2022).”
“With the insurance companies already imposing higher insurance premium (or not insuring at all) and the banks getting more reluctant to lend on flood-prone or cyclone-prone locations, it is reasonable to conclude that flood-prone properties will be facing significant downward pressure due to rising sea level and as such, to under-perform other residential property types into the future.”
Dr Peng Yew Wong is a senior lecturer in the School of Property, Construction and Project Management at RMIT University. His key research efforts centre on exploring the key determinants in the Australian and global residential and commercial property markets.
