Globally, extreme weather events are appearing more often recently, and will likely in the future: events like storms, heatwaves, floods and cyclones are predicted to become even more intense and destructive over the coming decades because of the alarming level of greenhouse emissions.
In Australia, extreme weather events have happened more often in recent years: Bushfire: 2008 (VIC), 2019 (NSW); Flood: 2011 (QLD-considered to be once in 100 years), 2022 (NSW, QLD-it happened again in just 10 years).
The amount of rainfall in the 3 weeks to 10/3/2022 in NSW and QLD is 1 in 200 years, which is extremely rare by any statistical measures. No one knows when a similar flood would happen again, however, it is reasonable to expect there is a realistic likelihood a similar flood event could happen in the future.
More destructive fires or floods are damaging homes and property with greater intensity and frequency. As a result, the costs of maintaining the property in all of these areas is increasing:
Mortgage providers: reassess the risks of lending due to riskier assets and therefore reduce the amount to lend
Insurance: reassess the risks, increase the premium significantly due to the higher chance of catastrophic loss
General upkeep: it would be more costly and more frequent to carry out regular maintenance.
Even if the repair costs are covered by insurance, the properties that are located in these areas are likely to lose their appeal. In the case of rental properties, tenants don't want to live in weather-plagued locales under the constant threat of the next natural disaster.
Selling a property in a high-risk area could mean less profit (or losses). Home prices are seeing dramatic shifts due to climate-related impacts: areas with an increased rate of damaging events are becoming less attractive, and prices are dropping.
Milk Chocolate Property has a strategy to minimise the weather risks:
Our rigorous due diligence process takes into consideration the risk of flood, bushfire and storm in the identification of properties and areas
We have access to the most comprehensive weather risk database (i.e. flood, bushfire…) that covers 100% of Australia
An extra buffer will be added to take into account the risks of extreme weather events, in addition to the historical trends
A site inspection is a must to identify any potential risks of extreme weather, in addition to desktop research.
Current flood in Brisbane: March, 2022 / Rainfall in Brisbane: this year in historical context
Modelled Flood Depth
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