House prices to fall because of climate change: Reserve Bank boss Michele Bullock warns Gold Coast,...
Australia's next Reserve Bank boss is warning prospective homeowners to be wary about buying a house on the or in an idyllic town on the coast. Michele Bullock delivered a speech in Canberra on Tuesday night suggesting 7.5 per cent of Australian homes are in postcodes where climate change could cause property prices to fall by five per cent or more by 2050. 'To capture the physical climate risks to residential housing, climate hazard data were used to measure the expected increase in insurance costs due to climate-related damage such as more frequent flooding and more damaging cyclones which were translated into housing price falls,' she told her audience at Australian National University. A colour-coded map illustrated the regions around the country that would be the worst affected with tomato red areas around the Gold Coast and Tweed Heads, suggesting price falls of five to 10 per cent in three decades because of flooding. This area south of Brisbane is popular with people from Sydney and Melbourne, who move there for the warmer climate, making south-east Queensland by far Australia's biggest destination for interstate migration. Most of the New South Wales north coast was coloured pink, denoting house price falls of two to five per cent, with dots of tomato red at Byron Bay, Ballina, Lismore and Grafton which have suffered from flood damage in recent years. Tomato red dots were also placed on the NSW South Coast in national park areas and towns on the outskirts of Melbourne, Adelaide and the Tasmanian city of Devonport. Mallacoota, in Victoria's north-east corner, also featured, having been the scene of devastating summer bushfires in early 2020. Areas of regional Western Australia were coloured maroon, suggesting price falls of more than 10 per cent. This included Geraldton, 400km north-west of Perth, which is prone to cyclones. Areas north including Carnarvon were coloured tomato red. A Climate Vulnerability Assessment by the Australian Prudential Regulation Authority, the banking regulator, showed Ms Bullock, who replaces Philip Lowe as Reserve Bank of Australia governor on September 18, suggested climate change could push up unemployment in pockets of Australia. 'Unemployment could be persistently higher if people are unable or unwilling to leave a region that has suffered from extreme weather and related job losses,' she said. 'Climate impacts vary significantly across regions an impact may be small in aggregate, but extreme for a local community.' But Ms Bullock has recently suggested the jobless rate will need to rise from a recent 48-year low of 3.5 per cent to 4.5 per cent for inflation to fall back within the 2 to 3 per cent target, down from July's 4.9 per cent level. 'If unemployment remains too low for too long, inflation expectations will rise, which will make it harder for the monetary policy authorities to bring inflation back down,' she told the Australian Industry Group forum in Newcastle in June. Based on June's labour force figure, that would see 149,309 Australians would lose their job by mid-2025, with unemployment in July rising to 3.7 per cent. Protesters stormed her Sir Leslie Melville Lecture, attempting to hand her a giant JobSeeker cheque. 'Hey Michele, you say 140,000 people should lose their jobs, how do you justify that?' the protesters yelled out. 'The cost of living crisis is driven by corporate greed.' A Climate Council report released last year predicted 90 per cent of homes in the Victorian city of Shepparton would be uninsurable by 2030 - and now they are severely flooded. In October, five months after that report was released, Shepparton in Victoria's north was bracing for a 12.2 metre flood peak, surpassing the levels of 1974.