As housing affordability in Australia has worsened in recent years, it’s also brought the cost and challenges of adapting to climate change into sharp focus.
More frequent and extreme weather events are already having an impact on housing, further reducing our stretched housing supply and contributing to increasing insurance costs. Climate change’s long-term impacts on mental health and economic resilience are also bubbling to the surface.
The research sector is likely to play an important role as we attempt to tackle these dual crises, and researchers around Australia are working hard to understand how these problems relate to each other, and come up with solutions.
To better understand the nature of the challenges and the research that is underway, we spoke with three housing and economic experts: Assoc Prof Ameeta Jain and Dr Hemant Pullabhotla from Deakin University, and Matthew Bowes from the Grattan Institute.
A problem of supply
Bowes, an associate with the Grattan Institute’s Housing and Economic Security Program, says Australia is facing both a home ownership and a rental crisis.
While wages have been growing at about 4% a year, rents in capital cities have been rising at about 8% a year, making it increasingly hard for renters to save a deposit to buy a home.
“Clearly there is something wrong in the housing market when we are seeing both house prices and rents grow faster than people’s ability to pay for those housing costs,” Bowes says.
But because the affordability crisis is being felt so acutely by many Australians, Bowes says policymakers are open to listening to researchers who present evidence-led solutions that can positively influence housing policy.
Bowes argues that at the heart of the problem is a supply shortage and urban planning constraints that prevent the development of affordable, dense housing in desirable locations. Pointing to evidence from overseas, he says increasing medium-density options in Australia’s cities could improve affordability and reduce environmental impacts.
Matthew Bowes
Developing climate-ready housing designs
Jain is an associate professor in property and real estate at the Deakin Business School. She says Australia’s affordability and supply crisis is being increasingly compounded by the impacts of climate change.
“Australia is the driest inhabited continent and is already experiencing the impacts of climate change, including bushfires, droughts, sea-level rises and flood disasters,” she says. “One in 25 Australian properties will be effectively uninsurable by 2030.”
She says evidence suggests that in Shepparton, for example – a rural city in an important food-growing area of Victoria – almost 90% of properties will be uninsurable by 2030.
A key part of the problem, Jain says, is that much of Australia’s housing stock is not designed to be climate ready. So, what can be done? One solution being developed by Jain and her colleague, Tom Keel, an associate lecturer, is a tool that can help homeowners and developers improve housing designs.
Ameeta Jain
Assessing climate change’s impacts on income and mental health
Pullabhotla, an economist and researcher at Deakin University, is also helping to further our understanding of the impacts of climate change on housing in Australia.
His work has focused on some of the longer-term economic and mental health impacts of a changing climate that are not yet well understood and could be key to developing more resilient housing and communities.
Pullabhotla says by understanding – and effectively communicating – the broader scale of these impacts, policymakers can make better funding and public policy decisions, protect at-risk groups and help individuals better assess risks when building housing.
Dr Hemant Pullabhotla
