KEY POINTS:
Some sought-after coastal properties could fall in value because insurers are refusing to cover them for extreme weather events linked to global warming.
The insurers' tough line against properties in flood and erosion-risk areas could make it impossible for buyers to get mortgages.
The move comes as climate change experts warn New Zealand will be hit by more severe storms, coastal erosion and flooding.
Already, insurers are refusing to cover some flood-prone Hawkes Bay and Coromandel Peninsula properties. Insurance Council chief executive Chris Ryan expects the refusals to increase during the next 20 years.
At worst thousands of properties could be affected, he said.
Mr Ryan said this week's United Nations Intergovernmental Panel on Climate Change report was a warning for homeowners.
New Zealanders must expect consequences from buying high-risk properties. "Over the next two decades, there will be far harder questions asked by insurers when people come to insure their homes about the risks that apply."
Mr Ryan said there had been a "rush to the coast" at a time when risks were dramatically increasing.
"The changing weather that we are experiencing will raise the risk for some particular properties. In a worst-case scenario, those properties might not get insurance."
Local authorities also might be asked to pay to better protect properties and bolster flood banks, he said.
The Australia and New Zealand chapter of the UN report said climate change was "very likely" to affect property values because of the increased hazards. It predicted erosion, rising sea levels and more storms affecting coasts.
And it said the price and availability of insurance would also take a hit: "Insurance costs are very likely to rise in areas with increased risk."
Mortgage Brokers Association chief executive Megan Salt said some lenders already would not provide mortgages for properties in flood-prone areas. "Whether that's now likely to extend to some coastal properties, they'll be assessing that."
She said any fallout from climate change was likely to be several years away because the timeframe for extreme weather predictions stretched to 2050. "Most mortgages are only 25 years anyway so we are a few years away from it yet."
Property Investors Federation vice-president Andrew King would still buy coastal property but said he was alert to warning signs. If a property was prone to flooding, that would be in its Land Information Memorandum - or LIM - report.
