In the current real estate climate, the “Resilience Gap” is becoming a significant, often invisible, liability in property transactions. For many buyers, the true implications of a property’s bushfire risk profile, both financial and materially, often only becomes visible well after settlement.

When purchasers are unaware that a property is categorised as Bush Fire Prone Land (BFPL), they are not merely financially exposed to higher insurance premiums or construction costs, they are vulnerable to renovation costs and the implications of being caught in a natural disaster. Having fought bushfires for over 25 years, I am confident in saying that preparedness is rarely intuitive. Residents who do not understand their property’s risk profile are statistically less likely to develop a formal Bush Fire Survival Plan, maintain required Asset Protection Zones (APZs), or proactively upgrade vulnerable building elements. Never mind understand the costs associated with renovating or development. Awareness must begin long before an emergency occurs or plans are drawn up.

A critical “Resilience Gap” or legacy liability exists in the built environment. The Royal Commission into Natural Disaster Arrangements, commissioned after the 2019/2020 bushfire season, flagged that approximately 90% of buildings in bushfire-prone areas in Australia were constructed prior to the application of modern bushfire planning and construction regulations. These legacy structures often lack the protection measures required under current Australian Standard AS 3959, indeed properties built before 2002 are potentially lacking any bushfire protection measure. For a purchaser, this represents a massive potential cost for retrofitting or future development, which can mean renovating or development budgets are underdone.

Three points that are particularly useful that conveyancers should consider:

Recent updates to the Application of Section 100B of the Rural Fires Act 1997 (July 2025) have clarified a point of confusion often encountered during the conveyancing process: cadastral (lot) boundaries are not relevant to the assessment of whether a development is on bush fire prone land. If any portion of a lot is mapped as bushfire prone, the entire lot is subject to the rigorous standards of the New South Wales Rural Fire Services, Planning for Bush Fire Protection 2019 (PBP).

Conveyancers must ensure clients understand that bushfire protection measures, such as APZs, are not one-off requirements. They are a suite of measures that must be maintained in perpetuity by the landowner. Failure to maintain these zones, which consist of managed Inner and Outer Protection Areas, not only increases physical risk but can degrade the legal compliance of the property.

The Insurance Council’s catastrophe data confirms insured losses are trending upward, with continued pressure expected as exposure and rebuilding costs increase. These costs ultimately flow to policyholders. As extreme weather losses rise, insurers are recalibrating premiums, excesses and policy conditions. Often buyers discover post-settlement that coverage is subject to significant excesses or exclusions that materially alter their financial risk. More recently, some insurers have begun requesting confirmation of a property’s BAL at policy renewal. I have helped clients being asked to provide formal BAL assessments to support renewal or pricing reviews. In some cases, premiums increased following BAL advice and bushfire risk assessment.

Hazard literacy, and its practicalities, within the transaction process should not be optional. It is essential to understand what hazard designations mean financially, how overlays influence development pathways, and where hidden costs emerge.

Natural hazard costs are accelerating. Planning frameworks are tightening. Construction standards are evolving. Insurance markets are repricing risk. Yet many purchasers still assess property primarily through price and amenity, not exposure.

Through my work with Bushfire Risk Assessments Pty Ltd, I have seen how early clarity materially alters buyer outcomes. When risk is assessed prior to settlement, financial implications are better understood, and property preparedness begins earlier, saving money, and improving community resilience.

Early clarity materially alters buyer outcomes. By integrating formal bushfire risk assessments into the pre-purchase due diligence, the profession can help bridge the gap between price and actual exposure. My work in this field continues to focus on providing the evidence-based data required to support better planning and insurance outcomes. I encourage any practitioners looking to strengthen their due diligence processes in this area to reach out for further resources or guidance on navigating these complex requirements.  If I can be of assistance, my contact details are below.

Ben Watson
Bushfire Risk Assessments
[email protected]   
www.bushfireriskassessment.com.au



Sources:

Karp, P. (2025). “At $4.5bn each year, extreme weather is costing Australia three times as much compared with 1990s.” The Guardian.

Insurance Council of Australia (2024). Industry Catastrophe Data & Insurance Loss Statistics.

News.com.au (2025). “QBE delivers profit jump despite wildfire payouts.”

ABC News (2026) “Home Insurance Premiums Increase 51% in five years”