Antarctic Sea Ice and impact on Home Lending
Updated: Sep 27
Really! I hear you say where is the connection? For more information you can check this link to NASA’s ‘Earth Observatory’ which also shows satellite records in terms of sea ice growth and depletion through the standard seasons https://earthobservatory.nasa.gov/images/151692/exceptionally-low-antarctic-sea-ice, but put simply, here’s some salient points:-
Generally some 15 million square kilometres of ice grows and melts in the Antarctic through seasonal trends. Measured since 1978.
Average sea ice extent in July 2023 was 1.5 Million kilometres less than the previous record low in July 2022.
Sea Ice has been declining in volume since 2014
Scientists are not certain as to what the drivers are for the lessening of the ice but as the article says, ‘’Ocean Heat may be playing a stronger role in limiting Autumn and Winter ice growth and enhancing Spring and Summer melting’’
Sea ice acts as a reflector of heat and therefore assists in keeping the Antarctic cool. As the ice lessens the surrounding ocean waters warm up, which has the further impact of speeding up the reduction of ice volumes. More information can be gleaned from this link https://www.asoc.org/learn/antarctic-ice-and-rising-sea-levels/ The Antarctic and Southern Coalition (ASOC) have been the leading voice for Antarctic Conservation since the late 1970’s. They are a global coalition of environmental and non-Government organizations.
Now the upshot of all the above and where the ‘water meets the land’ so as to speak, is that ice melts equal larger volumes of water, and that means a rise in sea levels, which also impacts on our river systems and alluvial catchment areas. That rise in sea levels appears to be increasing at a more rapid rate.
So the question being now posed to Governments, insurers, home lenders, and property owners, is what geographical areas will most likely be impacted and how soon?
There are already factual incidents of property owners being unable to obtain insurance cover for properties in or near to low lying coastal areas, or indeed inland river catchments. We have seen on our news bulletins where recent peak river flood levels have been exceeded. Examples in NSW can be seen in Richmond, Windsor, Lismore, Kempsey. So this impacts not just our immediate low lying coastline but also inland. If insurance is able to be obtained, it’s at a very large increased annual premium. We will then likely see that lenders after assessing their risk, will not accept mortgages over certain homes or commercial properties in certain regions in Australia. Part of a lenders’ requirement is that ‘flood and bushfire’ insurance has to be in place. The value of properties in these defined regions should then by default fall. Definitely something for home owners and/or commercial property purchasers to contemplate? The ocean & our rivers are beautiful places to visit, but not when it’s in your living room or flowing through your factory premises!
If you have any questions, please feel free to contact Michael on 02 6583 2211.