New study: Risks come with rewards of buying a seaside cottage
Rising sea levels are threatening prized coastal lifestyles. CoreLogic’s research for its proprietary Coastal Risk Score has identified 900,000 dwellings along Australia’s coast as “at risk of coastal exposure.”
Residz Team 2 min read
“Oh I do like to live beside the seaside, oh I do like to live beside the sea…” - Beside the Seaside by John Glover-Kind.
It’s part of every beach holiday…eyeing off real estate agents’ listings and dreaming of a seaside cottage to call our own. But rising demand for lifestyle-improving coastal dwellings may be tempered by rising sea level trends. CoreLogic’s research for its proprietary Coastal Risk Score has identified 900,000 dwellings along Australia’s coast as “at risk of coastal exposure.”
A CoreLogic report “Coastal Risk Scores for Financial Risk Assessment” has crunched the data and has assigned a coastal risk rating for 98% of Australian residential property. Most homes are at no risk for at least 240 years, if ever. Under 10 percent are at low or medium risk, but 12,694 houses and 9441 units are deemed to be “high” or “very high” risk of coastal exposure.
With sea levels predicted to rise between 1metre and 2.5 metres by 2100, a very high risk rating suggests a risk of gradual coastal erosion reaching the dwelling within 30 years, and/or very high risk of significant storm surge impact. High risk is erosion reaching dwelling within 60 years and/or high risk of significant storm surge impact.
Each risk assessment is based on exposure to compounding storm surge (rapid erosion) and change in coastline (slow erosion), factoring in Australia’s rising sea levels which are increasing at a rate higher than the global average. (IPCC)
Dr Pierre Wiart, CoreLogic’s Head of Consulting and Risk Management, and report author, said coastal risk has implications for the property market, including property valuations, home loan viability and insurance premiums.
Dr Wiart’s report shows that of the top 10 suburbs around Australia with the most value at risk, Paradise Point on Queensland’s Gold Coast has the highest volume of detached houses most vulnerable. About 20% of the suburb’s housing stock is at high risk.
The top 10 suburbs with most value at risk have close proximity to the coast, low elevation, fastest coastal retreat figures and high property values. Here are the top 10:
Seaside properties have been in high demand during the pandemic. A Real Insurance survey in mid-2021 found that almost two-thirds (64.8%) of respondents said they would relocate to areas within 30 minutes of a coastline. Just under 10 percent of respondents had already moved, another third (34.4 percent) were considering doing so in the near future.
Around that time JPM Valuers director Jason Matigian described a coastal lifestyle as having become ‘extremely important’ to buyers, saying he’d seen a ‘significant uplift’ in some coastal towns. With the release of CoreLogic’s report, buyers should assess the real risks of climate change, alongside considerations like choosing schools and assessing bushfire, crime, and other risks.
Image: Rob Farrow / Burgh Island Hotel - The Beach House, Wikipedia