New data has identified the affluent Gold Coast suburb of Paradise Point as having the highest value of property at risk of coastal erosion in Australia.
An estimated $1.4bn worth of property within 6.4km of the coastline in Paradise Point is at “very high risk” of coastal erosion or storm-surge-related damage within the next 30 to 60 years, according to analysis by CoreLogic.
Data shows about 20% of the suburb’s housing stock is at high risk, equivalent to 40% of the suburb’s total residential value.
That’s three times more value of property at risk than any other area in Australia – with more than 400 homes in Paradise Point classified as “high” or “very high risk”.
But the dire forecast for the suburb’s coastline hasn’t stopped buyers from flocking to the Gold Coast’s booming property market, says local real estate agent Mark MacCabe.
He says Paradise Point’s property market has surged over the past five years, with the average property selling for $1.1m and the top of the market seeing sales in excess of $3m.
“I’ve been a resident for 21 years in what’s considered a low-lying area of Paradise Point and we’ve never had a flood claim,” MacCabe said.
“I walk along the waterfront every day and I’m auctioning around Paradise Point every weekend, and I’m not seeing any signs of erosion.
“We’re getting no pushback at all, no questions or queries from a professional standpoint.”
CoreLogic said its data showed $25bn worth of property in Australia was exposed to a “very high risk” of coastal erosion. Most of that property was located on Queensland’s Gold Coast and Sunshine Coast.
Queensland has 311,148 homes located within 1km of the coastline at risk, with an estimated combined value of $218.4bn.
But Dr Pierre Wiart, CoreLogic’s head of consulting and risk management, said Paradise Point stood out for two main reasons.
“The first is all the residential properties have access to the lagoon and so they are at present located at sea level,” he said.
“Secondly, it has the highest concentration of building value in Australia, placing some of the country’s most expensive properties at risk.”
Wiart said that while there was a sand bar protecting Paradise Point, homes were vulnerable to flooding during violent storms or tropical cyclones when water from the lagoon hit its peak.
“Urban density on the coastal strip of the Gold Coast has been increasing,” he said.
“Some areas will be more at risk than others, and it would be wise for local councils and the respective communities to reassess their risk locally.”
Wiart said coastal damage would have far-reaching implications on Australia’s property market and financial sector, including on property valuations, home loan viability and insurance premiums.
“In the next three decades, coastal risk will crystallise, with the tangible effects of climate change already being felt in most parts of Australia,” Wiart said.
“If, during a storm, these properties are impacted then it might change their values, as we have seen during the 2011 Brisbane floods along the riverside-located suburbs.
“The … day we realise the area has become vulnerable could be the moment we see a change in the dynamic.”
