Climate disasters could soon be costing Australia $8.7 billion a year

Australians love housing as an investment. But the financial risks tied to climate change are climbing — and fast.

This week, the independent Climate Change Authority warned that by 2050, climate-related disasters could cost Australia $8.7 billion a year.

Compare that to 2025, where disasters so far have cost $2.2 billion — or about $80 per person. By mid-century, that figure over a year jumps to $255 per person [adjusted for a population of 34 million people], or over $1,000 a year for a family of four.

Homes and infrastructure obviously account for part of that massive damage bill, but there is another element to it.

When disaster strikes, housing markets can suffer. In the Northern Rivers, a year after the 2023 floods, property values dropped 22–30 percent, according to the Climate Change Authority's report.

And the issue isn’t just affordability — it’s risk. Buyers are facing homes they can’t insure due to increased flooding or bushfire threats, and that problem will only grow.

As insurance companies pull out of high-risk areas, the message is clear: if insurers won’t touch it, you probably shouldn’t either.

Climate Change Authority Chair, Matt Kean, says recent floods on the NSW Mid North Coast show how vulnerable many regions remain.

He said “authorities will need to review and tighten building codes. Parts of coastal Queensland and WA currently not covered by cyclone construction standards may need to be, and soon”.

The authority says Australians need better information when making decisions about where to build, buy or renovate.

But not everyone’s happy. In some areas, updated fire and flood maps — which can block development or deflate home values — are already sparking backlash. One Western Victoria council recently rejected new flood mapping altogether.

The tension: protect people and limit risk — or protect property prices and keep developing?

The federal government is yet to release a long-promised national climate risk assessment and adaptation plan, which is supposed to provide a framework for preparing the country.

The plan was due at the end of 2024. It’s now mid-2025 — and the bill for inaction is growing.