Strengthening building standards to improve home resilience for cyclones, floods and bushfires could save $4 billion a year, a report commissioned by the Insurance Council of Australia (ICA) has found.

Findings included that changing the code so new homes are made more resilient could reduce average annual building costs by an estimated $2 billion for cyclones, $1.475 billion for floods, and $486 million for bushfires.

The totals include insured losses, uninsured and underinsured losses, mental health impacts, loss of housing and employment impacts.

ICA is pushing for a broadening of the National Construction Code (NCC) scope to include resilience, and commissioned the Centre for International Economics (CIE) to evaluate the issue.

“This new analysis by CIE highlights the economic benefit and opportunity of strengthening the resilience of new homes in the face of worsening extreme weather,” ICA CEO Andrew Hall said.

“Currently, minimum building standards in Australia are designed to preserve life in a catastrophic event, but they are not designed with the goal of preserving the property itself.”

The Council of Australian Governments in March 2020 directed what is now the Building Ministers Meeting to consider how the code could be updated to enhance climate, and the Australian Building Codes Board is looking at the matter.

“We need to make our homes more resilient and we need to avoid building new homes in vulnerable areas,” Mr Hall said.

“We welcome the renewed focus on resilience by the Australian Building Codes Board, which sees strengthening our construction code as a critical solution to ensuring new homes withstand damage from floods, fires and cyclones.”

ICA has proposed embedding a definition for building resilience into the code to provide a threshold test for the review of provisions and standards. It says the NCC should also provide an explanatory statement and updated handbook for durability.

The CIE analysis of future residential building related costs related to bushfires, cyclones and floods indicates that by 2050 the costs of rebuilding, repairing homes, replacing contents and displacing people are expected to exceed $8.7 billion a year.

For cyclones, code strengthening could target wind-driven water ingress, where rain enters through windows, vents and doors, bushfire resilience could be improved through ember attack protection, while opportunities exist to limit flood risks with increased floor heights

The report also identifies non-code measures that would boost resilience and calls for states and territories to reform planning rules to prevent new homes from being built in high-risk areas of the floodplain.

It finds there’s been an increase in the number of houses in bushfire prone areas, particularly in NSW, Victoria and Queensland, and in most states and territories there’s no requirement for homes built more than 100 metres from vegetation to include protection measures, even in bushfire prone areas.

The NCC is Australia’s main set of technical design and construction provisions and is given effect through state government regulation.

“Importantly the NCC is only one lever to bolster resilience,” ICA says. “There are many other policy opportunities to better protect Australians, including increased resilience investment and reforming land use planning.”