Banks and insurers have huge responsibility when people are buying property in a time of climate change

The last thing anyone wants is a sudden plunge in house prices in a particular region. Yet it seems inevitable that some housing in vulnerable areas will be repriced. There is anecdotal evidence of this happening already in North Queensland.

To avoid hardship and loss to individuals, we need a concerted effort from all levels of government and all private sector stakeholders, to address the problem.

This is where banks come in. They are an unrivalled player in our economy – constituting the biggest sector of the share market. The big four banks hold about 80 per cent of all mortgages – and their relationships tend to last many years, allowing plenty of opportunity to inform their customers.

There is also a social responsibility dimension to the banks' roles. Contrary to what you might think, not all these exposed home-owners are the wealthy owners of sea-fronted mansions. A big bank might be able to write off a $70 million loss here or there when a flood or other hazard strikes. Individual Australians aren't so lucky if their single biggest asset takes a hit.

It's time banks began integrating climate-related risk into their assessment processes - to make good, responsible decisions when granting mortgages and especially financing property developments. As lenders for property purchases, they have the potential to press for good public policy in this regard -- and to work towards a good outcome together with stakeholders from civil society and from other parts of the private sector.

Buying and owning a home in a world of climate change heightens the responsibilities of all related players - banks, insurers and governments - at all levels. All play a crucial role. All need to lift their game.