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Physical and climate change-related risk identification in valuation practice: an Australian perspective

Georgia Warren-Myers (Faculty of Architecture, Building and Planning, The University of Melbourne, Melbourne, Australia)
Lucy Cradduck (QUT Law, Queensland University of Technology, Brisbane, Australia)

Journal of Property Investment & Finance

ISSN: 1463-578X

Article publication date: 25 February 2021

Issue publication date: 18 January 2022

710

Abstract

Purpose

The purpose of this research is to investigate Australian property valuers' identification and consideration of physical risks to properties in valuation practice. The research further explores valuers' considerations of climate change-related risks.

Design/methodology/approach

The research approach comprised an online survey of Australian valuers who were members of the Australian Property Institute. The online survey included structured and unstructured questions to explore types and extent of risk investigations in valuation practice.

Findings

The analysis reflects that while valuers easily identified and engaged with physical risks, there is a lack of understanding of, and engagement with, climate change risks. This supports the need for better information sources and guidance to inform valuers of climate change risks per se, as well as the development of specific mechanisms for consideration of such risks to be included in valuation processes, practices and reports.

Research limitations/implications

The research is limited by the small sample size achieved due to the timing of the survey deployment, which occurred during the first wave of COVID-19 lockdowns in Australia. Thus, the findings are not necessarily representative of the Australian valuation profession, but they do provide indications of current approaches to risk identification in practice and the need for more guidance in relation to climate change risks.

Practical implications

This research identifies that more support, guidance, information and tools, as well as awareness-raising, are required to enable valuers to accurately identify all risks affecting a property.

Originality/value

The research provides a snapshot of current understandings of physical risk identification in valuation practice. As investors and other organisations integrate and build up their analysis of climate risks to their portfolios and organisations, this research indicates that valuers also need to be aware of changing market assessment of physical and climate risks associated with property for consideration in valuation.

Keywords

Acknowledgements

The researchers acknowledge the assistance of the Australian Property Institute in facilitating distribution of the survey link through its online newsletter. The researchers also acknowledge the kind assistance of MH and JMc (both Australian Certified Practising Valuers but currently working in London and so outside of the research scope) in testing the survey on their PCs and mobile devices, and in providing feedback on it, prior to deployment.

Citation

Warren-Myers, G. and Cradduck, L. (2022), "Physical and climate change-related risk identification in valuation practice: an Australian perspective", Journal of Property Investment & Finance, Vol. 40 No. 1, pp. 14-37. https://doi.org/10.1108/JPIF-10-2020-0114

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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