The Exposure of Australia's Housing Stock to Climate Risks

Climate change has significantly influenced the intensity and frequency of extreme weather events impacting the globe, including Australia. This has implications for various sectors, including the housing market. Utilising postcode-level climate risk data—including for cyclones, floods, heatwaves, water stress, and wildfires—and data from the 2006, 2011, 2016, and 2021 censuses, we examine the susceptibility of Australia's stock to such hazards. Our investigation focuses on three main questions. First, we try to understand how the exposure of the housing sector to different climate hazards is dispersed geographically and how the vulnerability to extreme weather events evolved over time. Second, we investigate the extent to which the location of new homes throughout this period has raised or lowered the vulnerability of the housing stock. Third, we outline the historical trajectory of the housing sector's climate susceptibility and use our data to estimate how this is likely to evolve out to 2100. Our analysis reveals that the Australian housing stock displays pronounced susceptibility to water stress, moderate vulnerability to wildfires, and slight susceptibility to floods, cyclones and heatwaves. Furthermore, our findings indicate that growth in the Australian housing stock shows a negative correlation with the risk posed by heatwaves and the anticipated shifts in wildfire risk, whereas it exhibits no discernible association with other hazards.