This article draws on findings from the PropTrack Climate Council Property Value Flood Risk Report.
Australia’s housing market has long been a store of wealth and measure of aspiration, but in some regions property values increasingly reflect our collective exposure to flood risk.
For the first time, new research by PropTrack provides a national, data-driven view of how flood risk is already being priced into Australian property markets, analysing the impacts of flood risk on individual residential property values.
The data are not based on any future projections or climate change modelling, but the realised market impact of flood risk on property values in mapped flood zones and how that flood risk is priced across different regions today.
Our analysis combines Geoscape’s flood risk data with PropTrack’s property data, the PropTrack Home Price Index, realEstimate, and Market Insights to estimate the impact of flood exposure on Australia’s $11 trillion-plus residential property market. It validates individual property value impacts by risk segmentation, identifying the current impact of flood risk on property values.
Across the country, more than two million homes — roughly one in six — are located in mapped flood zones and exposed to varying levels of flood risk.
Of these, at least 70% have experienced a reduction in property value as a result of flood risk.
In regions where flood risk reduces property values, these homes are collectively worth $42.2 billion less than they would have been in the absence of flood risk – a cost borne by individual homeowners around the country.
On average, this equates to a $37,000 penalty per property across all dwellings, or about $75,500 for a typical three-bedroom house at risk of flooding versus a comparable flood-free home.
This value gap isn’t confined to regional floodplains. It spans the housing market, from the Northern Rivers and Brisbane’s western suburbs to affluent waterfront Gold Coast postcodes. In some high value areas, the gap well exceeds $500,000 per home.
Further in many regions, not only are homes at risk of flooding structurally discounted, but these properties at risk are also rising in value at a slower pace than flood-free counterparts.
This persistent flood risk discount and long-run growth penalty has real consequences for households.
Flood risk doesn’t just lower the value of individual homes – the penalty compounds over time.
Since 2000, flood prone properties have recorded cumulative price growth of 394%, compared with 416% for flood free properties – a 22 percentage point difference nationally.
For a homeowner with a $1 million property, that’s a potential $220,000 equity shortfall that creates a quiet but widening divide in household balance sheets.
From 2010 to 2025, homes at risk of flooding in some regions have recorded even larger growth gaps, in some cases underperforming up to 48 percentage points compared to homes without flood risk. Over 15 years this could mean close to $900,000 in forgone equity accumulation for a $1 million property.
For potential buyers, this could mean paying less upfront, but also building less wealth. For existing owners, it means holding an asset that may be harder to insure, harder to sell, and worth less over time.
In a market where home equity underpins household wealth, the consequences ripple well beyond property.
This emerging bifurcation between flood-safe and flood-vulnerable housing is the new frontier of inequality in Australia’s property market.
Prices of flood prone homes still rise over time, but often at a slower pace and from a lower base, leaving owners with less equity over time and weaker resale or refinancing capacity.
Housing affordability is at incredibly low levels. For prospective first-home buyers, affordability is sitting at its lowest level on PropTrack records, since 1995.
For some buyers, the ability to buy a cheaper property may outweigh the impact of flood risk and they may trade price for risk in today’s affordability challenged market. But the cheaper headline price masks higher lifetime costs, slower capital growth, and a widening equity gap.
In an affordability-constrained market, the policy goal should be more homes, in safer places, with clearer risk information as well as prioritising resilience upgrades and mitigation for existing lower cost homes.
Ensuring every unit of affordable housing is safeguarded against extreme natural hazards is foundational to equitable outcomes.
In regions where flood risk reduces values, homes exposed to flood risk are collectively worth $42.2 billion less than they would be in the absence of flood risk. A disproportionate share of this foregone value is borne by only a few regions reflecting the geographic concentration of risk.
About 90% of Australians live within 50 km of the coast, according to the ABS. Queensland and NSW have more flood-exposed geography, with more housing sitting on it.
As a result, these states are the epicentre of Australia’s flood risk, accounting for the lion’s share of flood-risk properties (70%) and $33 billion of collective value foregone borne by homeowners.
A disproportionate share of the national value gap is borne by just a handful of regions, with the Gold Coast ($4.5 billion) absorbing the largest losses in dollar terms, while parts of Cairns, Richmond Tweed, Gold Coast, and Brisbane absorb the largest losses relative to total market value.
The scale of these losses highlights the growing influence of flood risk in shaping long-term housing wealth if the risk, severity or frequency of extreme flood events increases.
Source: PropTrack, Geoscape
Importantly, if you're a homeowner in a region where flood risk is already reducing values, but your property is not currently exposed, these findings illustrate that your property may experience value loss if flood risk extends to your home in the future.
The 2022 floods in Lismore and Southeast Queensland show how the housing market is responding to more frequent and damaging extreme weather.
In Lismore, homes exposed to flood risk are now worth 37% less than flood-free counterparts, with the gap between flood-risk and flood-free homes widening by 21 percentage points since the 2022 floods – a structural repricing that persists years after the event.
In Brisbane, similar patterns emerged following the 2022 floods – price gaps widened, and sales volumes of flood-exposed homes fell sharply.
Our findings show flood risk is increasingly capitalised into housing markets, but not consistently.
In some lifestyle and coastal regions, buyers still pay premiums for waterfront homes despite the hazard, indicating that flood risk remains underweighted, or buyers’ amenity preferences simply outstrip the perceived downside of flood risk.
Over time, as insurance costs rise and extreme weather becomes more frequent, we expect market pricing to adjust at a cost to unprepared owners.
Flood risk is framed as a loss, but it also quantifies opportunity.
Reducing exposure through better land use planning, building standards and flood mitigation infrastructure could restore billions in unrealised value.
The Centre of International Economics found that flood levees or upgrades often provide benefits worth twice their cost, and in some cases, up to five times the initial investment (Insurance Council Australia).
Our modelling shows that investment in flood preparedness infrastructure, like levees, drainage, and stormwater upgrades can deliver a return on investment paying for itself many times over in preserved property value.
In fact, regions investing in flood mitigation, like Grafton with its levee upgrades, have shielded households from the flood penalty observed elsewhere and converted what would otherwise be a drag on capital accumulation into a foundation of resilience and avoided damages.
These examples reveal the economic upside of resilience where each dollar spent on protective infrastructure can deliver multiples in recovered residential value and most importantly community protection.
The data highlights the urgency of integrating climate risk into the foundations of Australia’s housing and planning systems.
Australia ranks second-highest globally for per capita extreme weather losses and this year alone insured losses approached $2 billion across 3 events (ICA). This high ranking is due to factors like geographic exposure, population growth in high risk areas, and insufficient infrastructure.
This underscores the need for national adaptation planning and standardised risk disclosure to keep homeowners informed and empower property seekers with the knowledge of climate risk when choosing a home.
For homebuyers and investors, understanding exposure is becoming as important as assessing proximity to schools or transport.
For policymakers, the challenge is to ensure that adaptation keeps pace, shifting from disaster management to a resilience focus, to prevent this divide worsening with increased extreme weather events.
A climate-informed housing market, backed by clear data, with coordinated adaptation policies is essential to safeguard economic stability and vulnerable communities.
Early identification of high-risk areas would enable more accurate credit and insurance pricing, guide targeted adaptation and resilience investment, and inform planning and zoning reform. Collectively, these measures could lower the risk of climate-related property devaluations that would otherwise trigger wider financial instability, and bolster the resilience of communities, markets, and the financial system.
The $42 billion in lost housing value revealed in this research is not just a cost but a signal revealing markets are beginning to price flood risk, with resilience architecture lagging.
The dividend of resilience will not just be measured in higher property values, but more importantly in the security and stability of the communities these homes shelter.
This article draws on findings from the PropTrack Climate Council Property Value Flood Risk Report. The report is the first national scale analysis of how the residential property market is responding to increasing flood risk.
