Australia Watchdogs Warn Homebuyers of Climate Change Impact and Low Property Values
By Reissa Su | June 6, 2014 9:02 AM EST
Climate and consumer experts warn homebuyers to consider climate change in their decision. According to Australia's Climate Institute and consumer watchdog Choice, buyers should be aware that climate change can reduce property values and increase insurance premiums.
A man climbs on the balcony of his house during heavy floods in Bosanski Samac May 19, 2014. REUTERS/Srdjan Zivulovic
Extreme weather events can lower real estate values by up to 20 per cent or more. The risk of climate change may also double the cost of insurance premiums in one mortgage term, according to a recently released report.
The report said climate change will only make "a bad situation worse" and cited extreme weather events like storms, floods, fires and soil erosion along the coast. Since real estate developers are not obliged to ensure homes are constructed to withstand extreme weather, governments may not be able to make the risk information more accessible to homebuyers. The report said insurers continue to be exposed to the risk which only results in more expensive insurance premiums.
The two organisations said the lack of readily available information only leave homebuyers at risk. John Connor, the Climate Institute's chief executive, said councils should provide better information about historical climate change data and include if certain properties are at risk.
Australians are getting more concerned about climate change based on the results of the latest Lowy Poll. According to meteorologist Dick Whitaker, Sydney and some parts of New South Wales had experienced the warmest 12 months ever between June 1, 2013 and May 31, 2014. He said the prolonged heat is far from over.
Australia remains on alert for El Nino as the weather phenomenon is expected to bring heavier-than-average rains to South America and droughts in the Asia-Pacific region. In the latest update, the Bureau of Meteorology said El Nino will probably develop by August.
The weather alert indicates there is at least a 70 per cent probability that El Nino will happen in 2014, according to the Bureau's Web site. Over half of the climate models studied suggested thresholds will be exceeded by August.
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