Queensland is unlocking land for housing at pace but the flood risk of those sites will not stay where the development approvals put it. Development changes how a catchment absorbs and sheds rainfall, which means the exposure attached to a new estate keeps moving after the last house is sold.
More than 5,300 hectares were released across the state in the past year for residential and commercial development, according to analysis Descartes Underwriting provided to Insurance Business, with Economic Development Queensland unlocking government-owned land and identifying priority growth areas. The Commonwealth and Queensland governments have committed to tens of thousands of new homes under the National Housing Accord.
The claims record that programme is running against is already heavy. Between 2022 and 2026, insurers handled more than 400,000 claims nationally for homes damaged in declared catastrophes, at an insured cost of $11.3bn, according to the Insurance Council of Australia (ICA). Queensland accounted for more than 214,000 of them. New South Wales had about 116,000 and Victoria about 25,000.
Most of the industry conversation about worsening flood risk is a conversation about climate. Descartes argues a second driver is doing quieter work alongside it.
“Land use is an important variable in flood behaviour that often gets less attention than climate conditions,” Daniel Lyons, senior research and development manager at Descartes Underwriting, told Insurance Business.
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The mechanism is unglamorous. Paving a catchment means less water soaks in and more of it runs into creeks and drains. Lyons said research into Southeast Queensland catchments has found urbanisation alone could lift runoff by roughly 10% to 80% over the coming decades.
“For a development at the scale Queensland is planning, it is of paramount importance to consider the impacts of floods,” Lyons said.
He said the majority of Queensland flood damage historically comes from intense bursts of rain over a few hours rather than multi-day totals, and that each 1°C of warming allows the atmosphere to hold around 7% more moisture. Descartes points to short-duration hourly extreme rainfall intensity rising by 10% or more in some Australian regions in recent decades, and to Paluma recording more than 175mm in three hours during the February 2025 North Queensland floods.
None of that means current flood maps are wrong. It means they describe a catchment that the development going up inside it is altering.
“Today’s standards in terms of what meets outside of flood zones or natural catastrophe zones could be very different tomorrow because of changing climate conditions,” said Lynn Roehrig (pictured), head of business development at Descartes Underwriting Australia.
That changing baseline is why the exposure cannot be assessed at a single point. It starts the day a site is cleared and does not stop when the asset is finished.
During construction, extreme rainfall causes delays, damaged materials and equipment, labour disruption and supply-chain lag, costs that accumulate on projects already tight on budget and programme and that a physical damage policy may not reach. Queensland has an unusual volume of that work ahead.
“Over the next couple of years, parametric insurance for construction is going to ramp up even more, particularly with the development of the Olympic sites and infrastructure required to host the games in Brisbane and across the state,” Roehrig said.
Traditional cover requires physical damage before it responds. A parametric policy pays on a pre-agreed weather metric, such as millimetres of rain in a day, with proceeds available for contractual fines and penalties, wages, equipment hire and other fixed costs. Roehrig said the cover responds to financial loss from a natural disaster, which may be physical damage but may equally be increased costs, lost revenue, lost profit or extra expense.
The same logic applies once the asset is operating. Roehrig said parametric cover can give councils a source of liquidity after a major flood for clean-up, clearing roads, debris removal and make-safe work, money that moves before a traditional claim has been assessed. The gap it fills is a timing gap, and timing is what a community recovery is usually short of.
A property sitting outside a flood zone at placement is not guaranteed to still be outside it at the fifth renewal. The buyer who chose a growth area on the strength of access to transport, services and employment will not necessarily have been told that, and the schedule of locations written against that estate today may describe a catchment that no longer exists in ten years.
The downstream consequence is visible in older stock. The ICA estimates around 1.36 million Australian properties face severe to extreme flood risk, concentrated in New South Wales, Queensland and Victoria.
The Australian Competition and Consumer Commission’s fifth and final insurance monitoring report, published in June 2026, put the average combined home and contents premium in north Queensland at $3,117 in 2024–25, up 4% on the previous year. The average for the rest of Australia was $2,310, up 10%.
The ICA has told the state’s planning policy review that hazard risk needs to sit at the centre of planning decisions, and that the state should specify how much risk it is prepared to accept. Its deputy chief executive, Kylie Macfarlane, said the industry supports simpler planning rules and consistent flood mapping, but not at the cost of protections that keep people and homes safe.
Queensland needs the housing. The open question is whether an asset that can be built can also be insured across its working life at a price its owner can carry and whether the catchment it sits in will still behave the way the approval assumed.
If it cannot, the saving does not disappear. It transfers to the people who buy the houses, the businesses that occupy the estates, the insurers that write them and the councils that clean up afterwards.
