Sydney storm: Waterfront mansions may become uninsurable

Sydney storm: Waterfront mansions may become uninsurable

"For 20 years, people have been saying one day a storm will come and get them -- that storm has come."

Australian news anchor Hugh Riminton has lived in Sydney for 20 years, and says the storm covering the majority of the lucky country's eastern coast is a warning to anyone else considering putting all their money into waterfront real estate.

Sydney storm: Waterfront mansions may become uninsurable

Damaged properties in Sydney (AAP)

It's already killed three people, after high winds coincided with king tides to bring 13m-high waves to Australia's biggest city.

"Overnight the tide was as high, but the waves were only seven metres -- I say 'only' seven metres -- so the worst of the damage, we're hoping, has already been done," Mr Riminton told Paul Henry this morning.

He watched the waves roll in yesterday from a clifftop, the strong winds forcing him to hold onto his daughter lest she be swept away "to Antarctica".

"It's a phenomenal thing to watch. The impact as it came in against those houses -- they're beautiful houses and apartment blocks, they sit right on the beach in those northern beaches."

Much of the property damage has been concentrated on a waterfront area of Sydney known as Millionaire's Row. Seven homes have been completely destroyed and others threatened with collapse after the beach beneath them was literally washed away.

Residents have been evacuated.

Sydney storm: Waterfront mansions may become uninsurable

Mr Riminton says while many of the owners would be insured, that might not be the case in the future.

"The insurance industry is increasingly saying that we have to be honest that there are places that are uninsurable. The whole concept of insurance -- which is that everyone chips in a little bit, and if bad luck strikes someone, the pool of money helps that person -- they're saying that doesn't actually work when there are people living in places [susceptible to flooding]."

The coastline, once only a 15- or 20-metre walk away, is now on their doorsteps.

"It is extraordinary that people seem so cavalier about those kinds of warnings. I guess you get seduced by those magnificent views and having a beach -- well, it was a beach about 15m from your doorstep. Now it is your doorstep."

Sydney storm: Waterfront mansions may become uninsurable

The ocean claims a swimming pool (AAP)

Meanwhile on this side of the Tasman, property investors looking at moving into coastal areas are being advised to think long-term. 

Chief executive of the Insurance Council Tim Grafton says the mixture of sea level rise and extreme weather events like the one which battered Australia's east coast will mean those in exposed areas will likely face high premiums, or no insurance at all.

"What you have got to recognise is that you renew your insurance annually, which is why insurers having difficulty trying to give that long term signal in price.

"We need to look ahead and say, well how do we actually stop these things from happening, or alternatively look at where we give consent for houses to be built."