Topics: housing market, climate change, natural disasters, interest rates, economy
“Going forward, the Australian property market will be more volatile compared to a decade long steady growth following the 2008 Global Financial Crisis (GFC) due to climate change related disasters.”
“Australia’s property market is already experiencing its most volatile period since the turn of this century, with many uncertain predictions, mainly due to the emergence of new drivers in the property market due to natural and man-made disasters. .”
“As we face the current challenges of climate change, the distinction between Black Swan events (global events so rare that normal economic models cannot predict them) and structural change (dramatic changes in the way a country, an industry or market operates) continues to narrow due to the increased frequency of man-made and natural disasters.
“Australia is expected to see more unconventional monetary policies, such as quantitative easing, being rolled out to address adverse economic impacts from man-made and natural disasters in the future.”
“Around one in 25 Australian homes is at 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 insurance companies already charging higher insurance premiums (or not insuring at all) and banks becoming increasingly reluctant to lend at sites prone to flooding or cyclones, it is reasonable to conclude that flood-prone properties will face significant downward pressure from sea level rise and, as a result, underperform other types of residential properties in the future.
Dr. Peng Yew Wong is a senior lecturer at RMIT University’s School of Property, Construction and Project Management. His primary research efforts focus on exploring the key determinants of the Australian and global residential and commercial property markets.
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