A property expert has warned climate change and rising sea levels will take their toll on costal property values, despite a Federal Parliamentary inquiry recommending taxpayers share the price of building sea walls and other measures to protect waterfront homes from rising sea levels and erosion.
David Airey, president of the Real Estate Institute of Australia, says erosion of coastal land is a growing problem, and suggests the debate over government measures to protect beachside properties could prompt property owners to consider selling while prices are high.
“This will have a big effect, if, as a result of the inquiry, there were designated areas that were marked as endangered, similar to areas that are prone to flooding. Those areas are going to suffer reduced values and obviously significantly higher insurance premiums.”
“I’m not going to suggest everyone living on a property or coastal region should sell their property, but certainly it’s worth considering if it’s likely that you will have, or already have, a property in one of those areas.”
The 47 recommendations from the Parliamentary inquiry’s report come just days after the NSW State Government intervened in a dispute between coastal property owners and the Byron Bay council, as authorities battle to determine who should maintain jurisdiction.
The council said owners of multi-million dollar homes could not protect their properties, but the State Government will now all owners to build their own sea walls.
Committee chairwoman, NSW Labor MP Jennie George, referenced the spat between the Byron council and the NSW Government in the report, saying the 47 recommendations are designed to reform an area usually reserved for local councils.
The recommendation to share the cost of sea walls would be part of a program financed by the State and Federal Governments, as opposed to the current model that places the burden on home owners. Also, local councils would have legal liabilities unless there is sufficient planning regarding areas affected by rising sea levels.
Additionally, the report recognises the problems associated with a “forced retreat”, which would see home owners abandon properties that have been too badly damaged by erosion.
The report requests the Law Reform Commission to seek “clarification of liability issues with regard to private property holders acting to protect their properties from the impacts of climate change”.
But the report also recommends the Productivity Commission should consider introducing insurance protections for coastal areas in order to avoid situations overseas which have seen some coastal properties excluded from insurance.
“We couldn’t fail to impress upon the Government that there are key, emerging issues that haven’t been given any consistent attention with regards to insurance and the uncertainties over legal liability,” George told the Australian Financial Review.
The inquiry, whose report was tabled in Parliament yesterday, also said the Federal Government should be given powers to block beachfront developments it deems as unsuitable.
A set of national guidelines would be drawn up in regard to the development of coast properties, with a federal agency able to overrule local councils regarding decisions made based on those guidelines.
The report recommends “the possibility of a government instrument that prohibits continued occupation of the land or future building development on the property due to sea hazard”.
It also references studies from the CSIRO which estimate sea levels in NSW will rise by 100cm by 2100, saying authorities should take the studies into account.
Jennie George did not return calls before publication.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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