Flood exposure is becoming a key factor in Australia’s housing market, with a new analysis showing one in six homes face some level of flood risk that is already affecting property values.
The PropTrack Climate Council Property Value Flood Risk Report, released in partnership with the Climate Council, is the first national dataset to measure the realised financial impact of flood risk on residential property.
The report combines historic hazard data from Geoscape Planning and Insights with PropTrack’s property data to assess how flood exposure is influencing prices across Australia.
According to the PropTrack report, over two million homes – around 17% of Australia’s residential properties – are affected by flood risk. Of these, at least 70% are in areas where flood exposure reduces property values.
In those regions, homes exposed to flood risk are collectively worth an estimated $42.2 billion less than comparable properties without such risks.
While flood-prone properties still appreciate over time, they do so “from a lower base and at a slower pace,” the report noted.
In affected regions, a typical three-bedroom, two-bathroom house at risk of flooding sold for $75,500 less than a comparable home without flood risk in the 12 months to April 2025 – an 8.5% difference in median values.
Queensland and New South Wales account for the majority of flood-prone homes, representing 40% and 30.1% of affected dwellings respectively.
PropTrack found that regions such as Richmond-Tweed, Cairns, and Brisbane’s western and inner-city suburbs have absorbed the largest cumulative value losses as a share of total market value.
In dollar terms, Queensland’s flood-related value gap exceeds $19 billion, with NSW following closely at more than $14 billion.
However, flood risk does not impact all markets equally. In some coastal regions, the value of scenic views and lifestyle appeal outweighs flood concerns, with buyers still paying premiums despite potential exposure.
PropTrack senior economist Eleanor Creagh (pictured) said flood exposure is becoming an increasingly influential factor in property valuations and borrowing risk.
“We’re seeing evidence that properties at risk of flooding experience value reductions and, in some regions, slower price growth over time,” Creagh said.
“This analysis is the first national-scale evidence of the current impact of flood risk on Australian residential property values,” Creagh said. “Unlike the Australian government's National Climate Risk Assessment, which forecasted potential value losses in Australian property values by 2050, this analysis identifies the realised impact of flood risk on property values today.”
The PropTrack economist said assessing climate-related risks will become a standard part of property due diligence.
“Assessing potential risks and hazards, such as flooding, is becoming an increasingly critical step at many stages of the property journey,” Creagh said. “The economic consequences of climate events will show up in our most personal asset: the family home. Just as location has always underpinned property value, we now need to think about climate location.
“With extreme weather events projected to become more frequent and severe, understanding the evolving relationship between climate risk and property value is essential to support a more resilient housing market and safeguard financial stability.”
For mortgage brokers, the findings underscore the growing need to factor climate risk and insurance costs into lending decisions, valuations, and client advice, as environmental exposure increasingly shapes long-term property performance – particularly in high-risk regions along the east coast.
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