From the CEO: The hidden cost of the housing crisis

Driving around the outskirts of our major cities and regional towns, it’s impossible to miss it: a surge of construction in areas that were once farmland. 

New homes are now rising where sheep, cattle, cotton and sugarcane once thrived. 

There is no doubt that Australia’s housing crisis is real and urgent. 

A growing population and record demand have magnified the push to build more homes — fast.

The quickest solution has been to develop on greenfield sites — what was once farms — where land is cheap and there is plenty of it, especially across Australia.

But with this comes substantial and escalating risk for everyone, risks that we can no longer afford to ignore.

Across the country, we are seeing a concerning number of new housing developments being approved in flood plains, bushfire zones and coastal regions exposed to inundation. 

These homes seem like an affordable solution for many, but in reality, they come with a lifetime of hidden costs.

Higher insurance premiums, and greater financial exposure for all households is the predictable result when thousands of homes are built in high-risk areas. 

Lenders, too, face difficulties in valuing these properties, as the market price often fails to reflect the long-term financial risk, especially when homeowners drop insurance when it becomes unaffordable.

While rapid land release may appear to offer a quick fix to the housing crisis, it often shifts long-term costs onto homeowners, insurers, and taxpayers. 

The issue isn’t whether to build — we need more homes — but where to build safely and sustainably.

The warnings are clear, yet the developments continue — and homeowners are paying the price.

We need a collective understanding of the extreme weather risks involved and a more sophisticated grasp of the true, long-term costs of development. 

Those costs aren’t borne solely by homeowners, but also by local councils and state and federal governments — especially when these areas are inevitably struck by floods or fires.

The current approach is not sustainable, economically or socially. 

Governments still spend around 92 per cent of disaster funding on recovery and only 8 per cent on mitigation projects to reduce the risk. That balance must change.

This is why this week’s roundtable at Parliament House, hosted by Suncorp, was so significant. 

It brought together experts from across housing, insurance, and emergency management to tackle a critical question: how can we deliver affordable housing without putting Australians at greater risk?

This isn’t just about protecting homes — it’s about protecting communities, livelihoods, and national resilience.

Decisions made by governments and developers in the past — allowing construction in floodplains and bushfire-prone greenfields — are now contributing directly to cost-of-living pressures for unsuspecting homeowners.

Insurers are dealing with the fallout. Over the past five years, insured losses from extreme weather have reached an estimated $22.5 billion, up 67 per cent from the previous five-year period. And the risks are only rising.

The government’s recent National Climate Risk Assessment projected that annual disaster costs from floods, bushfires, storm surges and cyclones could reach $40 billion by 2050, while property values could take a $611 billion hit.

As Prime Minister Anthony Albanese said, the findings are a “wake-up call.”

It is imperative that local governments factor in climate risk when approving not only housing developments but also critical infrastructure such as hospitals, schools, aged care facilities and emergency services.

Securing a seat at the table is only the first step. 

What’s needed now is a sustained, pragmatic dialogue — one that bridges lessons from the past with a clear-eyed view of the future and a shared commitment to building safe, enduring housing.

By uniting key sectors, this initiative can help establish a framework for more sustainable, climate-resilient, and affordable housing across Australia. 

But momentum must continue. The financial future of our homeowners — and the resilience of our communities — depend on it.