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Across Australia, climate change is beginning to redraw the map of where people feel safe to live, work and invest.1
Flooded river towns, fire‑scarred fringes and heat‑stressed inland suburbs are confronting a future in which repeated disasters, higher insurance costs and fragile infrastructure make staying put a harder choice.
While most Australians remain in place after floods or fires, a growing number of communities are weighing up whether rebuilding on the same block is wise, or even financially possible, as climate risks rise.1
This is not yet a mass exodus, but early signs of internal climate migration are emerging in government inquiries, insurance data and local planning debates.
Financial regulators warn that more frequent and severe disasters will push up insurance premiums and strain household budgets, especially in already vulnerable regions.1
Advocacy groups report that lower‑income Australians, who are more likely to live in high‑risk areas and in less resilient housing, face some of the steepest increases in premiums.6
As insurance becomes harder to afford in exposed coastal and river communities, some households are dropping cover altogether or quietly planning to move to less risky areas.1
Governments are starting to respond with disaster adaptation plans and new resilience funds, yet the policy framework for managing long‑term climate displacement within Australia remains patchy.
How these choices are handled over the next decade will shape local economies, food prices, social cohesion and the basic geography of who carries the burden of climate risk.
Climate pressures on where people live
Australia’s exposure to climate‑fuelled extremes is already high, with more intense rainfall, longer heatwaves and heightened bushfire risk projected under ongoing warming.1
In practice, that means repeated flooding in river valleys, coastal erosion in low‑lying suburbs and dangerous heat in some inland towns, all of which shape decisions about whether to stay, rebuild or relocate.
Research by the Reserve Bank of Australia notes that more frequent or severe weather events are expected to increase insurance claims on damaged property and other assets, raising premiums and affecting the price and availability of cover in high‑risk areas.1
The same analysis highlights managed retreat – moving people and assets away from high‑risk zones – as one of the tools governments may use as climate risks escalate.1
Alongside coastal and river flooding, extreme heat is becoming a defining pressure in some inland communities, raising health risks, undermining outdoor work and placing extra demand on ageing power and water systems.
Planning decisions made over past decades, including building in floodplains or expanding suburbs without robust heat and water strategies, are now colliding with a more volatile climate.
Human stories behind the shift
The human face of climate migration in Australia is most visible in regions hit by repeated disasters, where the choice to rebuild is no longer straightforward.
In New South Wales’ Northern Rivers, for example, whole neighbourhoods were inundated in the 2022 floods, prompting state buy‑back schemes and debates over which areas should be permanently relocated to higher ground.3
The NSW Reconstruction Authority is now leading Disaster Adaptation Plans for high‑risk regions like the Northern Rivers and the Hawkesbury‑Nepean Valley, explicitly considering where future homes, roads and services should be placed to reduce exposure.3
For many residents, the move away from a long‑standing home is driven less by abstract climate projections and more by repeated evacuations, mounting repair bills and the fear that the next flood or fire could be worse.
Community advocates warn that people with the least financial buffer – renters, casual workers, pensioners – are often least able to relocate safely, even when they want to leave high‑risk areas.6
Without targeted support, the risk is that climate migration becomes uneven, with better‑off households able to move early to safer, better‑serviced regions, while others remain in increasingly fragile locations.
Insurance, finance and forced moves
Insurance is emerging as one of the clearest channels through which climate risk is translated into pressure to move.
The Australia Institute reports that between 2022 and 2023, the average home insurance premium rose by 14 per cent, the biggest rise in a decade, with particularly steep increases in some high‑risk regions.2
The Reserve Bank has warned that as insurance costs rise and availability declines in exposed areas, more households may reduce their coverage or become uninsured, leaving them vulnerable to financial ruin after a major disaster.1
The Australian Prudential Regulation Authority has launched an Insurance Climate Vulnerability Assessment to explore how general insurance affordability may change to 2050 as physical and transition climate risks evolve across regions and sectors.4
Consumer advocates note that lower income Australians are more likely to live in higher risk areas and in less resilient housing, and they already pay higher premiums and additional charges when they cannot pay annually in one lump sum.6
In practice, this means climate risk is layered on top of existing inequality, with some households effectively priced out of insurance and nudged towards selling up or abandoning damaged homes after repeated events.
Planning responses and policy gaps
Governments are beginning to acknowledge that climate risk requires more than emergency clean‑ups, with new funds and planning frameworks aimed at long‑term adaptation.
At the federal level, the Disaster Ready Fund is providing up to one billion dollars over five years from July 2023 for projects that reduce disaster risk and build resilience, including levees, drainage and evacuation routes.7
New South Wales has introduced Disaster Adaptation Plan Guidelines that set out a four‑stage process for regional adaptation, from readiness and governance through to understanding regional risk and implementing early actions.3
The NSW Reconstruction Authority is developing Disaster Adaptation Plans for two high‑risk regions, the Northern Rivers and the Hawkesbury‑Nepean Valley, and has started early planning with regional organisations in areas such as the Central West, Illawarra Shoalhaven and Riverina Murray.3
These efforts signal a shift towards multi‑hazard regional planning, yet significant gaps remain in how internal climate displacement is identified, monitored and supported across states and territories.
There is, for example, no single national framework that defines when managed retreat should be used, how buy‑backs are funded over the long term, and how relocated communities will access housing, health care, schools and jobs.
Water security and infrastructure planning are also uneven, with some regional towns facing tighter water constraints as heat and drought intensify, while still promoting new housing estates without clear long‑term supply strategies.
Economic impacts on regions
Climate‑driven shifts in where people live have major implications for regional economies, from employment patterns to local government finances.
When repeated flooding or fire makes parts of a town less attractive to live and invest in, property values and rate bases can fall, limiting councils’ ability to fund essential upgrades and resilience projects.
Businesses in high‑risk regions may struggle with higher insurance and repair costs, as well as interruptions to trading, which can push jobs towards less exposed urban centres over time.1
In agriculture, shifting rainfall patterns and more extreme heat are already affecting yields and production risks in some areas, which can flow through to food prices and the stability of regional employment.
Urban agriculture and local food production are being explored as part of the response, with planning reforms in several Australian cities allowing underused land to be turned into community gardens and small urban farms.5
These initiatives aim to strengthen local food security, create new jobs and reduce the distance food travels, all of which can help buffer communities against supply disruptions linked to climate impacts on traditional farming regions.5
Social cohesion, inequality and displacement
Climate migration is not only about geography and economics, it is also about who is able to move early and who is left behind.
Consumer and legal advocacy groups warn that people on low incomes, including many in public or insecure housing, face limited options when insurance becomes unaffordable or when homes are repeatedly damaged.6
Without affordable relocation pathways, these households may experience deepening financial stress, mental health impacts and social dislocation, especially if local services and jobs decline in high‑risk areas.
Well‑designed disaster adaptation plans can help by involving communities in decisions about where new housing, transport and services will be located, and by ensuring that social cohesion and community networks are explicitly considered alongside physical infrastructure.3
However, experts emphasise that adaptation spending must be targeted to avoid entrenching disadvantage, ensuring that support for buy‑backs, retrofits and relocations is accessible to renters and low‑income homeowners, not only to those with significant assets.
What governments can do now
The emerging reality of internal climate displacement in Australia demands practical, near‑term measures rather than distant aspirations.
First, federal and state governments can expand and coordinate buy‑back and land‑swap programs in the most exposed flood and fire zones, using clear criteria and long‑term funding so communities know what support is available before the next disaster.3
Second, planning systems can be strengthened to prevent new development in high‑risk areas, and to integrate updated climate risk information into zoning, building codes and infrastructure decisions across states and territories.1
Third, targeted investment through mechanisms like the Disaster Ready Fund can prioritise projects that protect critical routes, utilities and community hubs, allowing people to stay safely where possible and to move in an orderly way where necessary.7
Fourth, regulators and treasuries can work with insurers, lenders and consumer advocates to monitor insurance retreat, identify hotspots where affordability is collapsing and design interventions that avoid sudden shocks to households and local economies.4
Finally, all levels of government can support regional economic diversification, including urban agriculture, renewable energy and care and services sectors, to provide new employment pathways in safer locations for those who need to move.5
Lessons from urban farming for global cities
Urban farming offers one lens on how cities can adapt to climate pressures while supporting communities that may be affected by displacement.
Case studies from Australian cities show that when councils update zoning to recognise urban agriculture as a legitimate land use, underused spaces can be turned into productive gardens and farms that strengthen local food systems and create jobs.5
Research on urban food security and climate resilience has highlighted the role of community gardens, rooftop farms and small‑scale commercial growing in improving access to fresh food and building local capacity to respond to shocks.8
For global cities, the lesson is that integrating food production into planning – through supportive zoning, water‑sensitive design and community‑led projects – can make neighbourhoods more resilient, especially when traditional supply chains are disrupted by climate impacts.
What must happen in the next five years
Over the next five years, regional planners and policymakers in Australia will need to embed climate risk into every major land‑use, infrastructure and housing decision, treating internal climate displacement as a real and growing challenge rather than a distant possibility.3
That means scaling up regional disaster adaptation plans, aligning them with federal resilience funding, tightening controls on development in high‑risk areas and establishing fair, long‑term arrangements for buy‑backs, relocation support and economic transition in affected communities.7
References
- Reserve Bank of Australia, “Climate Change and Financial Risk”, Bulletin, June 2023
- The Australia Institute, “Premium Price: The impact of climate change on insurance costs”, 2024
- NSW Reconstruction Authority, “Disaster Adaptation Plan Guidelines”, 2025
- Australian Prudential Regulation Authority, “Insurance Climate Vulnerability Assessment”, 2024
- Biomass Producer, “How Urban Agriculture Zoning Is Transforming Australian Cities into Food Gardens”, 2025
- Financial Rights Legal Centre, “Impact of Climate Risk on Insurance Premiums and Affordability”, 2024
- National Emergency Management Agency, “Disaster Ready Fund”
- P. Burton, “Urban food security, urban resilience and climate change”, National Climate Change Adaptation Research Facility, 2013