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Huge cost savings expected when homes are made more resilient

Annual residential building costs from extreme weather events addressed by the National Construction Code (bushfires, cyclones and floods) are around A$4bn ($2.53bn) per year, estimates the Centre for International Economics (CIE) - a leading economic research firm.

The Insurance Council of Australia (ICA) commissioned the CIE to conduct a high-level economic analysis of the anticipated costs and benefits of amending the National Construction Code (NCC). The Code is Australia’s primary set of technical design and construction provisions for buildings and sets the minimum required level for the safety, health, amenity, accessibility and sustainability of buildings.

The findings of the CIE are published in “Future Proofing Australia's Resilience – Insurance Council of Australia Summary Report”, released by the ICA.

The report estimates that strengthening the NCC could reduce the current average annual building-related costs estimated to be around A$486m per year for bushfires, A$2bn per year for cyclones, and A$1.475bn per year for floods.


The CIE analysis identified a range of areas where the NCC could potentially be strengthened to improve the resilience of buildings from the impact of cyclones. These impacts include the threat of water ingress, which is when water penetrates through the building’s windows, vents, doors, or other similar vents.

The report concludes there are significant opportunities and economic benefits from strengthening the NCC to reduce water ingress from wind-driven rain.

There are also opportunities to address high internal pressure in houses in areas which are currently not designed for high internal pressure. Internal pressure occurs when a house experiences damage to an external opening, such as a window or door in a tropical cyclone, and when combined with the large uplift pressures on the roof, can result in roof failures.

CIE also found that there are significant cross-overs between storm and bushfire resilience measures and, if taken together, they would deliver even greater economic benefits for Australian homeowners.


The report also highlights many Australian homes are susceptible to extreme damage from a bushfire as they are built to a standard that does not address some of the key causes of property loss, including house-to-house ignition, maintenance, compliance, landscaping and storage of combustible materials.

Concerningly, the report also confirms there has been an increase in the number of houses built in bushfire-prone areas, particularly in New South Wales, Victoria and Queensland, which will continue to increase exposure to bushfire-related risks.

The report also points out that despite ember attack being the main source of ignition for many bushfires in Australia, the basis upon which the relevant standard’s requirements are set is based upon flame contact and intensity, not ember attack.

In addition, the report finds that in most states and territories there is no requirement for houses built more than 100 metres from vegetation to include any bushfire protection measures, even if in a designated bushfire-prone area. The report proposes a series of relatively low-cost bushfire mitigation measures which are currently outside the scope of NCC, but which have the potential to improve resilience. These include increasing separation distances between buildings to limit the spread of fires between houses, as well as the use of non-combustible fences.


The report highlights the benefits and opportunities for improved integration between land use planning and building standards to minimize risk and to form a comprehensive flood risk management system. It found that the current building standards and codes are underpinned by historical rainfall regimes and do not adequately account for current and future conditions.

To address this, land use planning, building regulations and rainfall and runoff guidelines should be informed by forward-looking science and modelling that takes into account the growing risk of flooding events in the future.

In addition, the report highlights that the current building standards and codes do not achieve the desired outcomes in minimizing damage when floods occur, and that there are opportunities to enhance flood resilience through building standards, including increased floor heights.



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