Imagine returning home after a week away, only to find your house completely destroyed by floodwaters. This is the harsh reality for many Australians, and it’s a stark reminder of the devastating impact of climate change. Floods have slashed the value of Australian homes by a staggering $42.2 billion, according to a recent report by the Climate Council and PropTrack. But here’s where it gets even more alarming: this isn’t just about property damage—it’s about the deepening divide in housing wealth and the emotional toll on families.
Take Warwick Irwin, for instance. When he returned to his North Lismore home in February 2022, he was met with a scene of utter devastation. His house had been flooded to the ceiling just two days prior. ‘It was a mind-blowing experience,’ he recalled. Though he was fortunate enough to receive a buyback offer and relocate to a safer area, the anxiety of potential future floods lingered. ‘There would always be that worry,’ he admitted. Unlike Irwin, many others in the region were forced to sell their homes at a loss.
Lismore alone saw nearly 2,000 homes affected by the 2022 floods, and the gap in property values between flood-prone and flood-free areas has widened dramatically. As of April 2025, a typical three-bedroom, two-bathroom home in a flood-prone zone is worth $75,000 less than a similar home without flood risks. For the 2 million flood-prone homes across Australia, at least 70% have seen their values plummet due to this risk. And this is the part most people miss: over half of these properties are owned or rented by low-income families, who often have no choice but to stay in harm’s way.
‘Climate risks are exacerbating intergenerational inequality,’ warns Climate Councillor and economist Nicki Hutley, a co-author of the report. Families like Kate Smolders’, a Brisbane mother of two, are paying the price—both emotionally and financially. After her Chelmer home flooded in 2011 and again in 2022, she sold at a loss. ‘We couldn’t face going through it again,’ she said. Chelmer, in fact, topped the list of suburbs with the greatest value loss, at 10.6%, equating to an average impact of $303,000 per home.
But here’s the controversial part: while high-value suburbs are repricing due to flood risks, some argue that this could lead to a structural divergence in housing wealth based on climate resilience. Queensland and New South Wales bear the brunt, with 40% and 30% of at-risk properties, respectively. Experts like Hutley stress the urgent need for robust adaptation plans, including community infrastructure like dam levees and raised roads, as well as support for individual households.
Jason Byrne, a professor of human geography and planning at the University of Tasmania, points out that our planning systems are struggling to keep up with the demands of a changing climate. ‘We’re seeing some states take steps, like using accurate flood mapping to guide development decisions,’ he notes. However, the development industry often resists efforts to limit construction in flood-prone areas, and some councils have even ignored flood mapping to avoid hindering future growth. Is this short-term thinking putting vulnerable communities at risk?
‘Stupid planning decisions are putting people in harm’s way,’ Hutley asserts. With clear data on climate risks—whether from coastal inundation, riverine flooding, or bushfires—why are we still building in vulnerable areas? The long-term costs of such decisions will far outweigh any immediate gains. Do you think governments and developers are doing enough to protect communities from climate risks? Share your thoughts in the comments below.
