NEW: Simon Lloyd
Wednesday, April 11, 2007/
My tongue-in-cheek tsunami dig about coastal property may not have been too far off the mark.
Does your house float?
Last week I was only half-kidding when I blogged about hillside properties in north Queensland having the potential to boast themselves as “absolute waterfront” in the not-so-far-off-future – thanks either to tsunamis or relentlessly rising sea-levels or both.
It seems I was wrong to muse on such climatic dramas on the property market with even the tip of my tongue in my cheek. For there in the headlines this week was the Council of Australian Governments’ serious proposal (well, I presume it’s serious – but with COAG who would really know?) to spend up to $300 million mapping the regions of this country under threat from climate change events.
Now, I understand that my vague attempt at a humorous screed following the pre-Easter tsunami alert would hardly be enough to send tidal waves of fear among property owners from Cooktown to Coolangatta. But maybe this notion of COAG threat-mapping Australia’s coastline should at least trigger ripples of anxiety.
In The Australian newspaper yesterday, risk analyst Karl Mallon was reported as having told a Sydney forum that a house’s value could plummet by up to 80% if it were deemed uninsurable for a severe weather event caused by global warming.
At first glance that strikes me as a bit extreme.
After all, scores of thousands of property owners along the Queensland coast have already discovered that no insurance company will cover against tsunamis (yeah I know they aren’t severe weather events caused by global warming, but you get my tectonic drift).
And no real estate agent I’ve spoken to in the last fortnight has reported an inundation of beachfront owners wanting to sell for this reason. Nor is there any evidence that property values have fallen one millimetre since the tsunami scare got people thinking about their vulnerability.
But if we were to extrapolate Karl Mallon’s assertion to a time a few years hence when a threat map has been produced, then it’s not hard to see how property values might take a dive. How easy would it be for the insurance industry simply to refer to the map and refuse to provide any cover to properties within certain parameters (proximity to waterline, height above sea level and so on).
I’m starting to think it’s time to invest in houseboat futures…
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