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The Australian property market could see a decline of $770 billion as climate change fuels more intense and frequent extreme weather events.
The 2025 National Climate Risk Assessment (NCRA) report revealed that extreme weather could reduce housing market values by $571 billion by 2030, $611 billion by 2050, and $770 billion by 2090.
The report modelled the risks and impacts of temperature rising at 1.5 degrees, 2 degrees, and 3 degrees, with current United Nations estimates predicting temperatures to rise an extra 2.9 degrees by the end of the century.
NCRA cautioned that extreme weather events, such as heatwaves, tropical cyclones, bushfires and severe floods, will become more frequent, directly affecting homes, businesses and infrastructure.
The report found that coastal urban centres emerged as hotspots for climate risks, with sea level rise threatening infrastructure and assets.
Meanwhile, extreme weather is expected to disrupt transportation, energy and public health, driving up costs due to the resulting damage.
Other knock-on effects include reduced workforce and productivity due to heatwaves, as well as rising insurance premiums, or homes in high-risk areas becoming uninsurable.
Currently, across the nation’s 11.4 million properties, 794,000 residential dwellings are located in areas of very high risk.
The modelling forecast that by 2030, an additional 134,000 properties will be in high-risk areas, reaching 1,224,000 residential buildings in very high-risk areas by 2090.
While all Australians face mounting risks, property owners in Queensland and the Northern Territory are likely to experience the fastest and most severe weather challenges.
“Populations in the Northern Territory, Queensland north and Western Australia north are generally at higher risk of floods, bushfires, tropical cyclones and heatwaves today than other parts of the country,” the report said.
Under a plus 1.5-degree warming scenario, nearly 20 per cent of Northern Territory homes, around 52,000 buildings, will be in high or very high-risk areas, rising by 9.8 per cent (plus 7,000 buildings) under a plus 3-degree scenario.
Similarly, in northern Queensland, residential buildings in very high-risk areas are projected to rise from 178,000 at plus 1.5 degrees to 185,000 at plus 3 degrees across warming scenarios.
In addition to extreme weather events, the report found that rising sea levels are also set to impact coastal properties, displacing communities and disrupting livelihoods.
Across Australia, rising sea levels are expected to reach 50 centimetres by 2050 and over 80 centimetres by 2090, significantly impacting multiple states, particularly along the east coast.
“Coastal communities in Australia will face increasing impacts from sea level rise and heightened coastal hazards, particularly in low-lying areas,” the report said.
“All soft shore coastal environments are likely affected, either by erosion, storm surge or inundation.”
Of the 700 coastal communities studied, the report found that those at high or very high risk are projected to increase from 8 per cent in 2030 to 34 per cent by 2090, putting up to 3 million people in danger if population growth remains the same.
Coastal cities and major urban centres will be the most impacted by sea level rise, with densely populated areas, homes near soft shorelines, and erosion-prone coastlines particularly exposed.
Areas at increasing risk include Sydney’s Darlinghurst, Haymarket, Millers Point, Kogarah, Double Bay and Darling Point.
Similarly, south Melbourne and the eastern, western and northern edges of Melbourne’s CBD have also been identified as areas at risk.
The report also said that continued expansion of coastal suburbs and waterfront developments is expected to heighten future risks from sea level rise, storm surges and extreme weather events.
“Impacts of sea level rise and coastal inundation not only threaten the future state of property and infrastructure, but are also likely to challenge social cohesion and liveability.”
Additionally, the report warned against drought and bushfires, which are also projected to become more frequent.
bRight Agent co-founder Aaron Scott said that bushfire risks could be rising in far western Sydney and Melbourne’s outer suburbs, while flooding threats are increasing across inland Queensland, NSW, and Victoria.
“The Black Summer Bushfires along the eastern seaboard were only a few short years ago. What if that’s just a preview of things to come?” Scott said.
“We’re not just talking about climate impacting multimillion-dollar beach front mansions here.”
“Climate change has the ability to affect nearly every property in Australia, and as such nearly everybody in Australia,” Scott concluded.
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