Study reveals significant impact of flooding on home prices across key regions
Flood risk has led to a $42.2 billion reduction in the value of Australian homes, according to a recent report that examined more than two decades of property data alongside flood hazard information.
The study, conducted by the Climate Council in partnership with PropTrack, found that homes in flood-prone areas are collectively worth billions less than similar properties without such risks. The analysis shows that one in six Australian homes is currently at risk of flooding.
Queensland accounts for the largest share of these losses, with homeowners in the state seeing a combined $19 billion reduction in property values as of April 2025. The Gold Coast region alone has experienced $4.5 billion in foregone value. New South Wales follows, with more than $14 billion in value lost due to flood risk.
The report highlights that, although property prices have generally increased, homes exposed to flooding start from a lower base and appreciate at a slower rate. Since 2000, the price growth gap between flood-prone and flood-free homes has reached 22 percentage points nationally. For a typical three-bedroom, two-bathroom house, this equates to a $75,500 lower valuation.
The findings published in the Climate Council report indicate that over two million Australian homes are at risk of flooding, with at least 70% of these properties experiencing a decline in value. The impact is not evenly distributed, with certain regions bearing a disproportionate share of the losses. In Queensland and New South Wales, flood risk affects 40% and 30% of at-risk properties respectively.
Even high-value suburbs are not immune. In Queensland’s Mermaid Beach – Broadbeach, flood-prone homes are valued 48% lower than comparable properties outside flood zones, despite only 16% of houses being classified as flood-prone. In New South Wales, areas such as Bellevue Hill and Balmain have also recorded significant average losses per affected home.
The report notes that market behaviour and perceptions of vulnerability influence price outcomes. In some locations, amenities such as coastal views can offset the impact of flood risk, resulting in higher prices for flood-zone properties compared to risk-free homes. However, in areas where recent flood events have occurred, or where insurance is difficult to obtain, the price penalties are more pronounced.
The study concludes that as climate-driven flooding becomes more frequent and severe, the financial risks to homeowners are likely to increase. The insurance and banking sectors are already factoring climate risks into their decisions, but detailed information for individual homeowners remains limited.
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