Lethal Heating: Climate Change Is Costing Australians $42.2 Billion in Home Value Losses

Key Points

New analysis finds flood risk has reduced Australian home values by about $42.2 billion.^[1]
Around one in six Australian homes sit in mapped flood zones and many have lower sale prices.^[2]
Queensland and New South Wales account for the largest share of lost value, with suburban and prestige areas affected.^[3]
Flood-prone homes have seen 22 percentage points less price growth than comparable flood-free homes since 2000.^[2]
Insurance costs, market memory and local planning data are reshaping buyer behaviour and finance decisions.^[5]
Urgent federal action on emissions and improved, public flood mapping are needed to protect household wealth.^[6]

Climate change is quietly washing billions off Australia’s property market.

The Climate Council and PropTrack have released a national analysis showing that flood risk has reduced the value of Australian homes by an estimated $42.2 billion.^[1]

The study combines more than two decades of property sales and hazard mapping to compare long-term price growth for homes inside mapped flood zones with comparable homes outside those zones between 2000 and 2025.^[2]

The report warns that as climate-driven rainfall and coastal extremes intensify, the financial exposure from floods will deepen for homeowners, insurers and the national economy.^[3]

A $42 Billion Warning — What the Data Shows

Flood-prone properties have grown about 22 percentage points less in value than comparable flood-free homes since 2000.^[2]

Across all States, the cumulative loss adds up to around $42.2 billion, concentrated in New South Wales and Queensland, where repeated flood events have reshaped buyer sentiment.^[3]

The report shows that flood exposure is now a key determinant of property value and that the housing market is pricing in climate risk faster than governments are acting.^[1]

Regional Impacts — Who is Losing the Most?

Queensland accounts for 41 per cent of the total national property value loss, with towns from Gympie to Rockhampton bearing repeated flood damage.^[4]

In New South Wales, riverine communities such as Lismore and the Northern Rivers have seen sharp and lasting price impacts after the catastrophic 2022 floods.^[3]

Even inner-city and coastal suburbs once thought insulated, including Brisbane’s west and Sydney’s Hawkesbury-Nepean catchment, now face reduced property values due to new hazard mapping.^[5]

Insurance and Finance — The New Market Reality

Rising insurance premiums are amplifying inequality between flood-exposed and flood-free households, with some families paying ten times more than their neighbours.^[6]

Banks are increasingly factoring in physical climate risk, with some lenders adjusting loan-to-value ratios in high-risk postcodes.^[7]

These changes signal a wider recognition that climate risk is a financial risk, and that markets are beginning to price it accordingly.^[8]

Policy and Planning — Gaps and Delays

Experts warn that most Australian flood maps are outdated or incomplete, leaving communities unaware of their exposure until disaster strikes.^[9]

The Climate Council has urged the federal government to adopt a coordinated national flood mapping program and mandate disclosure of flood risks in property sales.^[1]

Alongside emissions cuts, improved planning, stronger building codes and public awareness campaigns are vital to protect property values and community safety.^[10]

What Happens Next?

Without rapid climate action, the property market will face increasing volatility, with billions more in household wealth at stake.^[6]

Analysts warn that as flood risk grows, insurance retreat and reduced lending could trigger localised housing market contractions.^[7]

For homeowners, investors, and governments alike, the findings mark a turning point where climate inaction carries measurable financial cost.^[1]

References

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24/10/2025

Climate Change Is Costing Australians $42.2 Billion in Home Value Losses - Lethal Heating Editor BDA