Climate Disasters Impact Housing Supply
· home-decor
The Hidden Burden of Climate Disasters on Housing Supply
The Australian government’s efforts to address the housing shortage have been hindered by an invisible force: the increasing cost of repairing and rebuilding homes damaged by extreme weather events. Between 2019 and 2023, the country spent $11.3 billion on these repairs, a staggering sum that underscores how climate disasters are quietly draining resources away from building new homes.
According to the Insurance Council of Australia’s annual report, declared catastrophes in 2025 damaged almost as many homes (145,392) as the total number of new homes completed that year (172,657). This statistic suggests that climate disasters are not just occasional occurrences but a persistent threat to housing supply. The council describes these damaged homes as “the homes we build twice,” highlighting the absurdity of repeatedly repairing and rebuilding the same ones instead of building new homes.
The cost of construction is skyrocketing, driven by rising materials and labor costs. Cotality’s Cordell Construction Cost Index reveals that total construction costs have increased 30% in five years, outpacing inflation by 6%. Essential building materials such as roof tiles (up 77%), windows (up 40%), and plywood (up 45%) are also becoming increasingly expensive. Labor costs are following a similar trend, with skilled tradespeople like roofers and glaziers seeing significant wage growth.
The consequences of this phenomenon are far-reaching. Climate disasters will continue to push existing homes back into the repair queue, exacerbating the housing shortage. The Insurance Council warns that governments must reform state taxes and levies that increase insurance costs, establish a Flood Defence Fund, and strengthen disaster preparedness. However, these measures alone are insufficient; what’s needed is a fundamental shift in how we approach housing development, prioritizing resilience and sustainability above short-term gains.
The Australian government has been aware of the risks posed by climate disasters for years. Since 2019, the Insurance Council has declared 29 extreme weather events, totaling $20.7 billion in losses. The most recent data shows that insured losses from these events are accelerating, with a whopping $3.98 billion incurred across 147,552 claims just last year.
The solution lies not in piecemeal reforms but in a comprehensive strategy to address the intersection of climate change and housing supply. Governments, industry leaders, and policymakers must work together to identify the root causes of these costs and develop innovative solutions that prioritize resilience and sustainability. The Australian government must acknowledge that its current approach is failing to keep pace with the escalating challenges posed by climate disasters.
The most expensive insurance event declared in 2025 was a series of severe storms and hail in Queensland and NSW, which exceeded $2.2 billion in damage spread across 95,692 claims. This event highlights the unpredictable nature of climate disasters and the urgent need for more robust disaster preparedness measures.
Australia will not tackle its housing shortage while climate disasters continue to push existing homes back into the repair queue. The time for incremental reforms is over; what’s needed now is a bold and comprehensive approach that puts resilience and sustainability at the heart of housing development policy, guiding decisions to prevent costly repairs and rebuilds in the future.
Reader Views
- TDThe Decor Desk · editorial
The $11.3 billion spent on repairing and rebuilding homes damaged by climate disasters is merely a symptom of a larger issue: the way we design and build for resilience in the first place. While governments tinker with insurance costs and flood defence funds, they'd do well to question the materials and labor practices that drive up construction costs. For instance, could using locally sourced and sustainable materials reduce our carbon footprint and, by extension, mitigate disaster risk? It's time to rethink our approach to building – not just in response to disasters, but as a proactive measure against them.
- PLPetra L. · interior stylist
The article highlights a crucial point: climate disasters are bleeding resources from new home construction. What's equally concerning is the lack of focus on sustainable building practices as part of this solution. Rebuilding homes damaged by extreme weather events should be an opportunity to incorporate resilient design features and materials, reducing future repair costs. By not incorporating green building standards into reconstruction efforts, we're essentially throwing good money after bad – repairing the same old vulnerabilities instead of breaking new ground with climate-resilient architecture.
- WAWill A. · diy renter
While the article highlights the staggering cost of repairing and rebuilding homes damaged by climate disasters, I think we're missing the bigger picture here: what about those who can't afford to repair or rebuild? The financial burden falls heaviest on low- and middle-income households who often have little savings to fall back on. Until governments address this equity issue and provide meaningful support for vulnerable homeowners, the housing shortage will only worsen. We need to think beyond just repairing "the homes we build twice" and consider how climate disasters are exacerbating existing social inequalities in our housing market.