Australia’s property market could lose $571 billion in value over the next decade due to the impact of climate change and extreme weather, a new report warns.
The Climate Council document also found the risk for Queensland was double that of other states and territories.
Report author and climate risk expert Dr Karl Mallon argued billions would be lost by 2030 if greenhouse gas emissions remained high and adequate action wasn’t taken.
“This is the largest analysis of property risk from climate change ever undertaken in Australia and uses the latest data from our universities,” Dr Mallon said in a statement on Thursday.
“Queensland is on the frontline of climate change impacts in Australia and the Gold Coast, Ipswich and the Sunshine Coast local government areas have been identified as amongst highest risk to extreme weather and climate change because they are very exposed to flooding and coastal inundation.”
Dr Mallon also suggested that, on current trends, one in every 19 property owners would face the prospect of “effectively unaffordable” home insurance premiums by 2030.
The report also found extreme weather events like heat waves and floods were affecting agriculture and food production.
It estimated one per cent of gross domestic product could be lost due each year to increasingly severe and more frequent drought conditions.
On current trends, climate change impacts are projected to reduce agricultural and labour productivity by $19 billion by 2030 and by $211 billion by 2050, the report says.
But fellow report author and University of Melbourne economist Tom Kompas said that figure could swell to $4 trillion over the next 80 years.
“This is not a trivial figure – it is more than double Australia’s current gross domestic product,” Prof Kompas said.
Land developers call bottom of property market
Land developers AV Jennings and Villa World have called the bottom of the property cycle after a year of slumping sales and consumer caution blew a hole in their profits.
AV Jennings said the current property cycle has “bottomed” and that it will deliver a stronger result next financial year, after its profits were cut in half to $16.4 million by wary homebuyers steering clear of big commitments.
“General market sentiment is clearly beginning to improve … a modest uptick in visitor numbers to sales offices and online is evident and is expected to be sustained during FY20,” AV Jennings said.
Villa World chief executive Craig Treasure said soft consumer sentiment, tight credit conditions and the uncertainty caused by the federal election had created “difficult headwinds”.
“We are seeing that sales enquiries have started to improve across Villa World’s projects, however buyers remain cautious,” he said.
Villa World’s profit after tax of $23 million was also shredded compared to the previous year when it earned $43.6 million.
“This result is consistent with commentary disclosed to the market since December 2018 and reflects the decline in the Australian residential housing market and softer consumer sentiment,” Mr Treasure said.
Villa World’s land projects are concentrated in Queensland and Victoria.
All metrics for the group suffered: earnings per share were down 48 per cent to 18.2c, total revenue fell 11 per cent to $391.6 million, and sales numbers slumped to 870, down from 1788 the previous year.
The property pain was similar at AVJennings where turnover fell 20.3 per cent to $296.5 million and profits crashed by 48 per cent.
“The lower profit reflects softer market conditions, particularly in Melbourne and Sydney,” the company said.
It paid an interim dividend of 1c on 22 March and will pay another 1.5c dividend on 20 September this year.
Villa World has agreed to a takeover by AVID Property group for $2.345 per share. It will declare a fully franked dividend of 31c, as a portion of the total takeover price if it goes ahead.
Brisbane Prices Could Be Headed For Recovery
Brisbane prices are at their lowest level in the cycle, according to the latest national property clock from Herron Todd White (HTW).
The house values in Brisbane, Bundaberg, Ipswich, Rockhampton, and Toowoomba were at the bottom, according HTW.
Meanwhile, prices in Cairns, Gladstone, Mackay, Townsville, and the Whitsundays are starting to recover, the data showed.
There was momentum for the price growth in Brisbane, given that the capital city had been “bouncing along the bottom for some time now”, HTW Brisbane managing director Gavin Hulcombe told The Courier-Mail.
“I think it will be (a) steady rise, but my suspicion is in a couple of years’ time we might look back and think it (now) probably wasn’t a bad time to buy. Some areas are likely to perform better than others,” he said.
Brisbane units are also at the bottom of the price cycle, along with Bundaberg, Ipswich, Mackay, Rockhampton, Toowoomba, and the Whitsundays, according to HTW.
Apartment prices in Cairns, Emerald, Gladstone, and Townsville are already rising, the figures showed.
Index warns council unit ban will impact boomer downsizers
A new housing index has warned that Brisbane will face a flood of ageing baby boomers with nowhere suitable to live unless it embraces greater density in suburbs where houses dominate.
- Property Management4 years ago
7 Common GST Mistakes On Property
- Residential3 years ago
Ipswich Proves Frontier In Affordable Housing
- Infrastructure2 years ago
Decision on horizon for key marina section of huge North Harbour development at Burpengary
- Developments1 year ago
Brisbane and interstate investors drawn to up-and-coming King Street precinct
- Market Place2 years ago
How to make $1 million ‘flipping’ houses
- Infrastructure3 years ago
Ikea looking for 250 staff to fill roles at new North Lakes store
- Market Place2 years ago
Seaside suburbs the star performers of southeast Queensland property market
- Opinion3 years ago
Are we headed for a housing crash — or not?