Making homes more weather-resistant could save an estimated $4 billion a year.
The Insurance Council of Australia said Federal, state and territory Building Ministers have endorsed a decision to include improving the resilience of buildings as a specific target for the Australian Building Codes Board (ABCB) from 2025.
“Issuing this order to the ABCB is the first step towards ensuring that the National Building Code in 2028 includes a requirement that new homes be constructed to withstand worsening extreme weather events,” the ICA said in a media release.
A study by ICA’s Center for International Economics found that strengthening national building codes to make homes more resilient to extreme weather could save an estimated $4 billion a year.
This includes reducing average annual construction costs from cyclones by $2 billion, average annual construction costs from floods by $1.5 billion, and average annual construction costs from bushfires by $500 million.
Another analysis conducted by the McKell Institute for the ICA in 2022 projected that the economy-wide costs of extreme weather will increase by 5% per year (before inflation), reaching $35 billion per year (in 2022 dollars) by 2050.
The ICA also commended ministers for their efforts to improve the safety and reliability of building products.
Up to 72% of Australian homes have defects, costing them around $2.5 billion a year in damages, and reducing these costs could lead to lower insurance premiums.
In addition, the ICA supported ministers’ agreement to set out a voluntary pathway for commercial buildings to measure their internal carbon emissions in the 2025 National Building Code, with the possibility of including minimum standards in the 2028 code.
“Homes should be built to last a lifetime so they must be able to withstand intensifying cyclones, more severe bushfires and worsening floods. Premiums are at risk and pressure on them will continue unless we mitigate long-term risks through hardening our homes,” ICA CEO Andrew Hall said in a statement.