Coastal property prices could fall on climate fears

By Stuart Fagg, ninemsn Money

A government report has cautioned that more than 700,000 coastal buildings around the nation maybe under threat from rising oceans and extreme weather events and has canvassed the option of forcing people living near the coast to move inland.

Some of Australia’s most exclusive, and expensive, suburbs are within the 3km coastal zone and less than six metres above sea level identified by the parliamentary inquiry as being under threat.

"Values will be negatively impacted in some areas, particularly those that are likely to be most affected," Tim Lawless, national research director at RP Data told ninemsn.

Some coastal property owners have been unable to secure insurance due to fears of rising sea levels and Mr Lawless said this will make some wealthy buyers think twice about coastal and waterfront purchases.

"If you can’t get insurance for a waterfront property that will affect your decision on whether to buy," he said.

"It doesn’t matter how wealthy you are, if you are spending millions of dollars on a property and you can’t get insurance, you will think again."

Seven of Australia’s top ten most expensive suburbs are all located within the coastal zone identified as being under threat by the parliamentary inquiry.

However, any fall in prices may take some time to hit the luxury market.

"Despite the uncertainty around insurance and what councils may or may not do regarding reparations, at the higher end of the market the focus is on prestige," Mr Lawless told ninemsn.

"It is a small market and there is scarcity of supply. Ongoing demand may come off, but it will still be there."

Australian Greens leader Bob Brown said a rise in sea levels would cause a big re-alignment of coastal housing and other buildings.

"(Climate Change Minister) Penny Wong herself has said that up to 700,000 properties are threatened this century by rising sea levels on the eastern Australian seaboard," he told reporters.

"There is the question of whether you believe these theories," the expert told ninemsn.

"Some of these warnings could change and until we know what’s coming with more certainty, it won’t impact prices too much. That said, insurance companies are declining insurance on some properties and they are pretty sophisticated in identifying risks."

With AAP