Climate Change Risk Awareness in the Property Sector: Australia

Worldwide between 2000 and 2014 disaster impacts triggered $US2.3 trillion in damage with less than 30% insured (Munich RE, 2015), this affected 2.9 billion people and killed 1.2 million people between 2000 and 2012 (UNISDR, 2013). The property sector is not immune to risks associated with natural disasters or extreme weather events. Climate change and the implications of increased extreme weather events, severe temperature durations and sea level rise have a detrimental, immediate and significant impact on property. Property is not only a component of providing shelter to all inhabitants of Australia or a workplace; property is major industry sector within Australia, currently employing more than the mining and resources sector (PCA, 2015). Consequently, increasing catastrophic events as a result of Climate Change will have a substantial impact on the property sector financially, physically and socially. Furthermore sea level rise will affect many Australian cities, in particular Victoria is highly exposed with between 31,000 – 48,000 residential buildings, 1,500 – 2,000 commercial properties and 600 – 1,000 light industrial properties and major infrastructure like 3,500km of roads and 125km of rail at risk of inundation from sea level rise (Department of the Environment, 2011). The financial cost implications for property is only going to escalate, as populations grow, a larger percentage of property - residential, commercial, infrastructure situated in cities will be at risk and the incidence of events will exacerbate the economic and social impact. Property owners need to put in place mitigation and adaption strategies now in order to cope physically, financially and socially with the changes to come, however, at present the industry is currently unaware of the extent of the risks posed to property. Consequently, the development of a value based risk assessment tool is required to enable property owners, occupiers and professional the ability to understand the risks posed by Climate Change and the subsequent effects on property in the Australian environment. This paper reports on the development of a risk assessment tool in the Australian environment.