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Property worth $277 billion faces climate risk in Victoria: CoreLogic

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Almost 9% of households in Victoria are at “very high” risk of climate hazards, with another 8% exposed to high risk – equating to $277 billion of property under threat, CoreLogic says.

CoreLogic’s analysis found climate change is likely to affect many parts of Victoria under extreme future scenarios even as the Victorian Government already provides funding to tackle erosion at beaches such as Apollo Bay, Lakes Entrance and Mallacoota.

“Our research shows that rising sea levels are likely to exacerbate coastal erosion in many parts of the state,” CoreLogic’s Head of Consulting and Risk Management Solutions Pierre Wiart said.

Victoria’s diverse landscape is vulnerable to both severe bushfire and flood and both these risks are likely to be on the rise due to both drier environments, and separately, increasing precipitation, he says.

CoreLogic’s research analysed over 2.5 million Victorian residential properties to assess climate hazard ratings and scenario outcomes at property level. The research outlined Victoria’s hazard profile and overall risk level for properties exposed to bushfire, drought, precipitation and sea level rise.

“Phenomena like rising sea levels, coastal erosion, bushfires and floods can present a major risk, with potential impacts likely ranging from reduced asset value and credit losses to financial losses due to damaged property and infrastructure,” Dr Wiart says.

Bushfire risk is highest around Melbourne’s north-east between Melbourne and the Yarra Ranges, from Ballarat to the border of the Lerderderg and Wombat State Parks, and the Great Otway National Park.

Flood risk is significant from Swan Hill to Echuca and Shepparton due to the Murray River, while Dr Wiart says the flat landscape of Melbourne creates a flood risk from the Yarra, Maribyrnong and Werribee Rivers.

“Accurate future flood projections can be tricky due to conflicting forces at play, namely the relative impacts of drought and precipitation,” he says.