Be Mindful of Insurance in the North

There are growing reasons to consider the growth prospects in regional markets in the northern parts of Australia. Townsville, for example, has strong credentials and is becoming a notable growth market. Darwin, after several years in the doldrums, has recently become a national leader for growth in both rents and prices.

Investors, however, need to be mindful of a factor they may not consider until after buying - insurance premiums, which can be scarily high as a result of major weather events in the tropical areas. The consumer watchdog ACCC has completed a three-year inquiry into insurance costs in Northern Australia and has recommended a raft of changes after finding premium rates have risen faster and by more than in other regions of the nation. “In 2018-19, the average premium for combined home & contents insurance in Northern Australia was approximately $2500, almost double that for the rest of Australia ($1400),” the report said. “We recommend changes to improve the comparability of insurance products, require insurers to share certain information with consumers and make it easier for consumers to access information.

“Average excess levels selected by policyholders in North Queensland … are 50 to 60% higher than average excess levels selected by policyholders in the rest of Australia.”