<a href="https://www.apartments.com.au/developers/capital-corporation">Capital Corporation</a> has announced that its <a href="https://www.apartments.com.au/new-townhouses/lovedale-farm-1054-1184-wine-country-drive-lovedale-nsw-2325">Lovedale Farm</a> residential, resort and golf project has secured $24.6 million in sales in just three weeks since the opening of its display home, underscoring the appetite for premium lifestyle property in the Hunter Valley countryside.

The sales milestone has been driven by a diverse mix of buyers, including owner-occupiers and investors from Sydney, Newcastle and the local Hunter region, purchasing both land-only lots and house and land packages across the development.

<img alt="Lovedale" data-entity-type="file" data-entity-uuid="e173edc9-e60e-4f19-a060-9dc4421a3233" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/LovedaleFarm_20250215-1.jpg?VersionId=1LY6CvOaD.Dzrt8tWpWxXtPyfchixNIo" />

&nbsp;

The result builds on the momentum generated at the display home opening on 22 March, which attracted more than 460 attendees.

With house and land pricing from $1.14 million, Lovedale Farm continues to attract strong interest from buyers seeking a premium lifestyle offering at a compelling price point. The development’s vision, a championship golf course, future epicurean village and access to the Hunter Valley’s celebrated wine country, has resonated with a broad buyer profile, from first-time investors to those looking to make the move and call the Hunter Valley home.

<img alt="Lovedale Farm records $21.4 million in sales in three weeks" data-entity-type="file" data-entity-uuid="b358e789-e1eb-40ed-8105-ed5c8297136f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/20260321LovedaleFarmDisplayHomeOpening--6.jpg?VersionId=6GUO8TNnxuELONrsM6n9imDB6oc82Bor" />

Jim Hunter, Managing Director of Capital Corporation said the response since opening the display home has been encouraging.

"To reach $24.6 million in sales in just three weeks speaks to the genuine demand for a lifestyle community of this calibre in the Hunter Valley," Hunter says.

"We’re seeing buyers from across the region and beyond, including investors who recognise the long-term value, and owner-occupiers who simply want to live somewhere truly special.

“Lovedale Farm is two decades in the making, and the market’s response is everything we hoped for. We’re excited to see these first buyers become part of the Lovedale Farm story from the very beginning."

<img alt="Lovedale" data-entity-type="file" data-entity-uuid="54d985cf-2ac2-400b-ac02-4401f3421ac7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/20260321LovedaleFarmDisplayHomeOpening--5.jpg?VersionId=3866bPoqpLZsm.3ACg9EafAr1W3miC_f" />

&nbsp;

Spanning 240 hectares on Wine Country Drive in <a href="https://www.apartments.com.au/developments/lovedale-nsw-2325">Lovedale</a>, the $1 billion development is expected to deliver around 1,250 jobs during construction and inject more than $300 million into the local economy. The first 200 homes and championship 18-hole golf course are anticipated for completion in late 2027.

Capital Corporation has also lodged development plans for the Lovedale Farm clubhouse, set to become a vibrant hub for residents and the wider Hunter Valley community. Further releases are planned for later this year.

[smartcode_project_cta:default project_id=14476]

Joel Robinson

Lovedale Farm display home opening triggers $24.6 million in sales in three weeks

Prominent Malaysian developer <a href="https://www.apartments.com.au/developers/osk-property">OSK Property</a> has unveiled <a href="https://www.apartments.com.au/new-apartments/aura-at-melbourne-square-7-hoff-boulevard-southbank-vic-3006">Aura</a>, the next stage of its $3.5 billion Melbourne Square precinct in Southbank, continuing its push into wellness-led, amenity-rich apartment living.

The $800 million tower, planned for 7 Hoff Boulevard, will rise 67 storeys and deliver 673 apartments, with COX Architecture drawing on both Japanese design principles and Australia’s natural landscape to shape the building’s identity. A rectangular grid aesthetic defines the building’s exterior, with COX drawing design cues from New York high-rises and Tokyo’s skyline.

Aura builds on a growing trend in high-density living, where wellness is no longer an add-on but central to the product. The development is structured around four key pillars, combining calm, minimalist residences with layered communal spaces, landscaped gardens, and a suite of wellness amenities designed to support both physical and mental wellbeing.

[smartcode_project:default project_id=151921 project_image_fid=367465]

At the core of the project is what OSK describes as a vertical wellness ecosystem, a multi-level approach to amenity that integrates health, lifestyle, and social spaces throughout the building rather than confining them to a single level.

The main resident hub, the Aura Club on level seven, will include a pool, cold plunge, spa, gym, Pilates and yoga studios, alongside more lifestyle-driven inclusions like a golf simulator, music rooms, library, and work-from-home spaces. Above, a series of higher-level amenity zones, including the Meridian Club and Cumulus Club, introduce more refined, social and retreat-style environments, with private dining, lounges, and premium wellness spaces positioned to take advantage of city views.

[smartcode_project:default project_id=151921 project_image_fid=367467]

The residences themselves will largely include balconies, a key design move in a market increasingly focused on natural light, airflow, and connection to the outdoors. Views will extend across the CBD, the Arts Precinct, Royal Botanic Gardens, and beyond.

Aura also introduces approximately 1,600 sqm of retail across the lower levels, further activating the Melbourne Square precinct, which already includes Kennedy Park, a Woolworths, childcare, and a growing mix of hospitality operators.

[smartcode_project:default project_id=151921 project_image_fid=367474]

“Aura stands tall as an exemplar of holistic wellness – its focus on social, physical and mental health culminate in a building that is calming, restorative and relaxing, where residents will have their own sanctuary within the well-connected and sought-after <a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>," says&nbsp;OSK Property CEO Chong Boon Woon.

“We have been very encouraged by the market’s response to the BLVD offering, and we know there is a strong demand for the level of amenity, service and design that the Melbourne Square precinct is known for.

“Complemented by work-from-home lounges for professionals, family friendly outdoor garden spaces, and state-of-the-art fitness and wellness facilities, Aura will continue our focus on maximising physical, emotional, and mental wellbeing,” he said.&nbsp;

[smartcode_project:default project_id=151921 project_image_fid=367475]

The project follows the strong performance of BLVD, which is now around 80 per cent sold, and reinforces OSK Property’s long-term commitment to Melbourne Square as a fully integrated, mixed-use precinct.

Construction is expected to commence in late 2026.

[smartcode_project_cta:default project_id=151921]

OSK unveils AURA, the latest stage in Southbank's $3.5 billion Melbourne Square precinct

National developer Time &amp; Place appears to have settled on a design for its long-anticipated Potts Point project.

After several years of back and forth with local council and the NSW Government, the developer, which has spent seven years targeting the former The Chimes site on Macleay Street, has now progressed its plans.

Following a concept design submission last year by SJB, Time &amp; Place has lodged a full State Significant Development Application with the NSW Government, this time for a scheme designed by Kerry Hill Architects.

<img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="504d2a27-d65f-4227-8189-1e35e3376e62" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.38.24%E2%80%AFAM.png?VersionId=_XqFKATYHF30KnVByPxhaI9UBzmkmfn7" />

The 16-storey proposal includes 44 apartments, 21 of which will be build-to-sell. These will comprise 19 three-bedroom apartments and two four-bedroom units.

More than 50 per cent of the development will be dedicated to affordable housing, with 23 studio apartments to be delivered in line with the NSW Government’s Housing SEPP.

Kerry Hill Architects said the proposal is driven by a strong response to place.

“Our proposal for a new residential building for Potts Point in Sydney is driven by a deep consideration of place,” the practice said in its submission.

“This operates on multiple levels, including a landscape approach that reinstates endemic flora of the Sydney peninsula and provides a ground-floor garden for residents, reconnecting the site to its pre-European history. A brick podium further strengthens this relationship to context, integrating planting and fine bronze detailing that references the predominant material language of Macleay Street.”

The three-level podium will be topped by a communal resident space, featuring a covered pool designed to receive direct afternoon sun in winter, a neighbouring reflection pool, dining and event areas oriented to maximise sunset views, and an outdoor exercise zone.

<img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="8d3eedc1-babb-44a3-bd96-d8a42f3adf1f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.37.48%E2%80%AFAM.png?VersionId=Ii7.4dvqNatu5GQi6bhqNjAswrMB998." />

The design also incorporates highly crafted shopfronts and a clearly defined residential entry to activate the street. Juliette balconies to the podium residences will provide passive surveillance and a strong sense of habitation.

Above, the larger apartments are housed within a light-coloured masonry and bronze tower.

“The tower steps back in a series of gently curved volumes that reference the rich Art Deco context of Macleay Street,” the architects said. “Carefully calibrated vertical fins frame the views while providing privacy and a sense of refuge.”

<img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="6fab60f4-3140-4469-b47a-48c781e0a30b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.28.44%E2%80%AFAM.png?VersionId=e5XxrM3kzdASdKlcIACHAHbOSZhSKC9O" />

Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in South Melbourne.

The developer has approval for The Burke, a mixed-use project in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>&nbsp;being delivered in partnership with Woolworths. The 60 apartments, positioned above a new Woolworths supermarket, are expected to launch in the coming months. Time &amp; Place is also progressing plans for the redevelopment of&nbsp;<a href="https://www.apartments.com.au/developments/northcote-vic-3070">Northcote</a>&nbsp;Plaza, and have recently submitted plans for a <a href="https://www.apartments.com.au/news/vic/time-place-unveils-plans-22-storey-south-melbourne-tower">22-storey tower</a>, another in South Melbourne.

In&nbsp;<a href="https://www.apartments.com.au/developments/sydney-nsw">Sydney</a>, the developer has two projects in Manly: Two Tides, which is currently under construction, and an ultra high-end building on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach. It is also continuing to work through the redevelopment of The Chimes building on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as Marlborough House, the redevelopment of the original David Jones warehouse building in&nbsp;<a href="https://www.apartments.com.au/developments/surry-hills-nsw-2010">Surry Hills</a>.

First look: Time & Place settles on design for The Chimes, Potts Point redevelopment

<a href="https://www.apartments.com.au/developers/develotek">Develotek</a> is joining the likes of TOGA, Deicorp, and One Global Capital, betting on a boom in Five Dock ahead of the 2032 mooted opening of the Five Dock Metro Station.

Develotek, which is currently developing Bianca on the Drummoyne waterfront and has plans approved for a tower in Chatswood, has filed a State Significant Development Application for a <a href="https://www.apartments.com.au/new-apartments/79-81-queens-road-five-dock-nsw-2046">two-building project in the evolving Kings Bay precinct</a>.

The buildings, one more boutique just five storeys and the other 26 storeys, will rise from an 3,158 sqm site across&nbsp;79–81 Queens Road and 2–8 Spencer Street, will home 134 one-, two-, and three-bedroom apartments, above ground-floor retail and five basement levels of parking.

A key component of the proposal is the inclusion of 15 per cent of residential floor space as in-fill affordable housing, unlocking additional height and density under the Housing SEPP.

<img alt="First Look: Develotek lodges State Significant shop top housing project in Five Dock precinct" data-entity-type="file" data-entity-uuid="3ee31bf7-75ba-4bc5-b190-49885193219f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium_2.png?VersionId=730UbrduuwK3C1sO28RHjiLPUPqXqjkh" />

Designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a>, the scheme adopts a podium-and-tower configuration, with a five-storey street wall along Queens Road transitioning to a 26-storey tower set deeper into the site. The ground plane prioritises activation and permeability, with retail frontages and a new through-site link connecting Queens Road to Spencer Street.

At the upper levels, the tower façade has been conceived using a modular system to support prefabrication and reduce construction waste, while improving build efficiency. The splayed form draws on the geometry of surrounding industrial rooftops, reinterpreting the area’s heritage in a contemporary expression while also helping to reduce solar heat gain to east and west-facing apartments.

“This project aspires to transform a former industrial site into a connected, resilient and people-focused urban community, grounded in Country, shaped by history, and designed to enrich everyday life within the evolving Kings Bay Precinct,” said John Walsh, Principal at Plus Studio.

The proposal reflects the broader transformation of the Kings Bay Precinct under the Parramatta Road Corridor Urban Transformation Strategy, marking a shift from its industrial past to a higher-density, mixed-use urban neighbourhood.

<img alt="First Look: Develotek lodges State Significant shop top housing project in Five Dock precinct" data-entity-type="file" data-entity-uuid="abde734c-1e31-4a97-a1d2-fa9bcf31c380" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/building%20podium.png?VersionId=fNUupP6u146yEytQT31kKVRxwtACgPpP" />

Develotek is emerging as an active participant in the state’s affordable housing-led uplift pathway. The developer recently secured approval for a 34-storey mixed-use tower in Chatswood, where it similarly leveraged the in-fill affordable housing provisions to increase scale and deliver a 101-unit scheme with dedicated affordable apartments.

Their entry into Five Dock places them alongside a growing list of developers targeting the suburb ahead of its anticipated transport uplift, with Sydney Metro set to extend into the area. Major players including TOGA, Deicorp, and One Global Capital are all progressing large-scale precinct-style developments nearby, collectively reshaping the low-rise industrial fabric into a higher-density mixed-use corridor.

The Five Dock site sits within the Kings Bay Precinct, a key renewal area under the Parramatta Road Corridor Urban Transformation Strategy, where planning controls support significant uplift tied to affordable housing delivery. The consolidated 3,158 sqm site is currently occupied by low-rise industrial uses, including warehouses and vehicle workshops, earmarked for transition.

First Look: Develotek joins in Five Dock apartment boom

Ascot’s Racecourse Road continues to be a hive of activity for Brisbane developers.

Following Fortis and GRAYA, which are both preparing new projects along the key strip connecting Kingsford Smith Drive and Eagle Farm Racecourse, local developer <a href="https://www.apartments.com.au/developers/skyhold">Skyhold</a> is the latest to lodge plans for its own development.

The group is proposing One One Two Residences, a boutique project comprising just seven apartments, named after its address at 112 Racecourse Road.

The proposal outlines a five-storey building on an 810 sqm site. The built form slightly exceeds the four-storey expectation under the neighbourhood plan, aligning instead with the emerging character of the strip. As the planning report notes, “the locality is characterised by a transition toward medium-rise residential development, with a number of recent developments… above the stipulated height limits.”

<img alt="First Look: Skyhold lodges plans for boutique Ascot apartments as Racecourse Road revival gathers pace" data-entity-type="file" data-entity-uuid="ec577631-8c51-4163-960e-e7b3a77d655b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ascot.png?VersionId=iAzQ46D4Uu1UqiS0mVnlcy9jeFKBpJIj" />

Designed by 111 with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/paul-bangay-garden-design">Paul Bangay Studio</a>, the scheme adopts a layered architectural approach with strong articulation and a subtropical response. Deep balconies, integrated planters, and a mix of masonry and textured finishes define the façade, while upper-level setbacks reduce perceived bulk. The architectural statement describes “a series of horizontally expressed layers, defined by deep balconies and a consistent robust material palette,” aimed at delivering a refined streetscape presence.

Apartments are configured as large-format residences, including multiple three-bedroom layouts and a full-floor penthouse, supported by ground-level parking. A rooftop terrace will provide communal amenities including a pool and landscaped recreation areas. The design prioritises privacy, natural ventilation, and greenery, with planting integrated across all levels to soften the building form and contribute to the public realm.

<img alt="First Look: Skyhold lodges plans for boutique Ascot apartments as Racecourse Road revival gathers pace" data-entity-type="file" data-entity-uuid="1e1219bd-b45a-4d7f-bbc7-7207d7b2fc94" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ascot%20entry.png?VersionId=JIoUOLMgQ5xWpEF0etEI3ffIoIVjD7gO" />

The proposal sits within the Racecourse Road precinct, a key mixed-use spine in Ascot that continues to attract renewed development interest.

Later this year national developer Fortis will launch its own boutique development, which, pending council approvals, will be 16 apartments designed by Koichi Takada Architects, just down the street.

“Racecourse Road is going through a massive revitalisation and we’re proud to be a part of that transformation,” said Fortis's QLD General Manager, Dan Boman.

Nearby, GRAYA is advancing its larger-scale The Gallery, a mixed-use shop-top housing project designed to act as a “catalytic project for Racecourse Road.”

First Look: Racecourse Road, Hamilton revitalization to continue as Skyhold joins the party

Bushfire

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GUEST OBSERVATION
Last season’s bushfires directly <a href="https://www.dailytelegraph.com.au/bushfiresupport/fathers-son-newlyweds-21-lives-lost-to-nsws-deadly-bushfires/news-story/0ba931abc7ce3f1bac820429873b75c2">killed 34 people</a> and devastated more than 8 million hectares of land along the south-eastern fringe of Australia.
A further <a href="https://www.theguardian.com/australia-news/2020/may/26/australias-summer-bushfire-smoke-killed-445-and-put-thousands-in-hospital-inquiry-hears">445 people</a> are estimated to have died from smoke-induced respiratory problems.
The burned landscape may take decades to recover, if it recovers at all.
While it’s become known colloquially as the <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-04-16/bushfire-royal-commission-begins-into-australia-black-summer/12152680">Black Summer</a>, last year’s fire season actually began in winter in parts of Queensland. The first fires were <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-06-27/bushfire-outlook-queensland-2019/11251150">in June</a>.
So will the 2020 fire season kick off this month? And is last summer’s inferno what we should expect as a normal fire season? The answer to both questions is no. Let’s look at why.
Last fire season
First, let’s recap what led to last year’s early start to the fire season, and why the bushfires became so intense and extensive.
The fires were so severe because they incorporated five energy sources. The most obvious is fuel: live and dead plant material.
The other sources bushfires get their energy from include the terrain, weather, atmospheric instability and a lack of moisture in the environment such as in soil, timber in houses and large woody debris.
The <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-06-27/bushfire-outlook-queensland-2019/11251150">June fires</a> in Queensland resulted from a drought due to the lack of rain coming from the Indian Ocean. The drought combined with unusually hot dry winds from the north-west. <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-08-28/queensland-bushfire-season-starts-earlier-lasts-longer/11456576">By August</a> the bushfires were burning all along the east coast of Australia and had become large and overwhelming.
Ahead of the fire season, environmental moisture was the lowest ever recorded in much of eastern Australia. This was due to the <a href="http://www.bom.gov.au/climate/iod/">Indian Ocean Dipole</a> – the difference in sea surface temperature on either side of the ocean – which affects rainfall in Australia. The dipole was in positive mode, which brought drought. This meant the fire used less of its own energy to spread.
Fire weather conditions in south-eastern Australia were severe from August 2019 until March 2020. Temperatures reached <a href="https://www.theguardian.com/australia-news/2019/dec/19/419c-australia-records-hottest-ever-day-one-day-after-previous-record">record highs</a> in places, relative humidity was low and winds were strong due to high-pressure systems tracking further north than normal.
High atmospheric instability, often associated with thunderstorms, enabled large fire plumes to develop as fires grew to several thousand hectares in size. This increased winds and dryness at ground level, rapidly escalating the damaging power and size of the fires.
Fuel levels were high because of the drying trend associated with climate change and a lack of low-intensity fires over the past couple of decades, which allowed fuel levels to build up.
What’s different now
Currently, at least two bushfire energy sources – fuels and drought – are at low levels.
Fuels are low because last season’s fires burnt through large tracts of landscape and it will take five to ten years for them to redevelop. The build-up will start with leaf litter, twigs and bark.
In forested areas, the initial flush of regrowth in understorey and overstorey will be live and moist. Gradually, leaves will turn over and dead litter will start to build up.
But there is little chance of areas severely burnt in 2019-20 carrying an intense fire for at least five years.
What’s also different this year to last is the moist conditions. Drought leading up to last fire season was severe (see below).
<a href="https://images.theconversation.com/files/340760/original/file-20200609-21201-quf46h.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/340760/original/file-20200609-21201-quf46h.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Rainfall Deficiencies: 36 months (February 1 2017 to January 31 2020). <a class="source" href="http://www.bom.gov.au/jsp/awap/rain/index.jsp?colour=colour&amp;time=history%2Fnat%2F2017030120200229&amp;step=4&amp;map=drought&amp;period=36month&amp;area=nat">Australian Bureau of Meteorology</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a>
Environmental moisture was the driest on record, or in the lowest 5% of records for much of south-east Australia.
But the current level of drought (see below) is much less pronounced.
<a href="https://images.theconversation.com/files/340761/original/file-20200609-21208-1l3nwlm.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/340761/original/file-20200609-21208-1l3nwlm.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Rainfall Deficiencies: 12 months (June 1 2019 to May 31 2020). <a class="source" href="http://www.bom.gov.au/jsp/awap/rain/index.jsp?colour=colour&amp;time=history%2Fnat%2F2019050120200430&amp;step=0&amp;map=drought&amp;period=12month&amp;area=nat">Australian Bureau of Meteorology</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a>
A change in weather patterns brought good rains to eastern Australia from late February to April.
A turning point?
It’s too early to say conclusively how the fire season will pan out in 2020-21. But moister conditions due to a neutral Indian Ocean Dipole and <a href="http://www.bom.gov.au/climate/enso/history/ln-2010-12/SOI-what.shtml">Southern Oscillation Index</a> (which indicates the strength of any <a href="https://theconversation.com/explainer-el-nino-and-la-nina-27719">El Niño and La Niña</a> events), the lack of fuel, and more normal weather patterns (known as a positive <a href="http://www.bom.gov.au/climate/sam/">Southern Annular Mode</a>) mean there is little prospect of an early start to the season.
The likelihood of severe bushfires in south-east Australia later in the year and over summer is much reduced. This doesn’t mean there won’t be bushfires. But they’re not likely to be as extensive and severe as last fire season.
The reduced bushfire risk is likely to persist for the next three to five years.
 
But, in the longer term, climate change means <a href="https://www.climatecouncil.org.au/not-normal-climate-change-bushfire-web/">severe fire seasons are becoming more frequent</a>. If we simply try to suppress these fires, we will fail. We need a concerted effort to manage the bushfire risk. This should involve carefully planned and implemented prescribed fires, as well as planning and preparing for bushfires.
Last bushfire season should be a turning point for land management in Australia. Five inquiries into the last bushfire season are under way, including a <a href="https://naturaldisaster.royalcommission.gov.au/about">royal commission</a>, a <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Finance_and_Public_Administration/Bushfirerecovery">Senate inquiry</a> and inquiries in <a href="https://www.safecom.sa.gov.au/site/independent_review_sa_201920_bushfires.jsp">South Australia</a>, <a href="https://www.igem.vic.gov.au/fire-season-inquiry">Victoria</a> and <a href="https://www.nsw.gov.au/nsw-government/projects-and-initiatives/nsw-bushfire-inquiry">New South Wales</a>.
These inquiries must lead to change. We have a short window of opportunity to start managing fires in the landscape more sustainably. If we don’t, in a decade’s time we may see the Black Summer repeat itself.<img src="https://counter.theconversation.com/content/139757/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/kevin-tolhurst-184">Kevin Tolhurst</a>, Hon. Assoc. Prof., Fire Ecology and Management, <a href="https://theconversation.com/institutions/university-of-melbourne-722">University of Melbourne</a>
This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/its-12-months-since-the-last-bushfire-season-began-but-dont-expect-the-same-this-year-139757">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

12 months since the last bushfire season, don't expect the same this year

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GUEST OBSERVATION
Australia’s catastrophic bushfire season has done immense damage to Australia’s tourist industry. Then, just as heavy rain began to bring the situation under control, came the coronavirus outbreak in China – now the top source of international visitors to Australia. Tourism from China, already greatly reduced, ended with the ban on non-citizens travelling from China.
The general assumption has been that, once the immediate crises are over, Australia’s tourist numbers will bounce back.
Optimists point to examples such as Japan following the March 2011 earthquake and tsunami that killed more than 15,000 people, resulted in the <a href="https://www.iaea.org/newscenter/focus/fukushima" target="_blank">Fukushima Daiichi nuclear disaster</a> and forced more than 500,000 people to evacuate.
Tourism to Japan took a hit. International visits in 2011 fell 28%, to <a href="https://theconversation.com/making-it-safe-tourism-after-japans-earthquake-5691" target="_blank">6.2 million</a> from 8.6 million in 2010. By the end of 2012, however, numbers were back to more than 8.3 million. Tourism to the devastated Fukushima region took a little longer to bounce back, but by fiscal 2015 had recovered to nearly <a href="http://www.fukushimaminponews.com/news?id=709" target="_blank">90% of numbers in fiscal 2010</a>.
The same was true of the 2004 Boxing Day tsunami that wreaked catastrophic damage and killed an estimated 230,000 people in Indonesia, Sri Lanka, India, Thailand and other countries in the Indian Ocean region.
Terrorist attacks in major cities have a similar immediate impact on travel, but this soon dissipates.
There are, however, good reasons to think this time is different.
Unprecedented duration
First, most disasters of this kind have been single-day events. Relief efforts and damage assessments can dominate the news for a week or more, but other events soon take their place.
By contrast, Australia’s bushfire emergency ran for months, generating extensive worldwide coverage for much of this time. The COVID-19 outbreak epidemic is still front-page news and will probably remain so until it has been contained.
Second, the typical shock of this kind has no long-term effect on perceptions of the country where it takes place. The vulnerability of the Pacific Rim to earthquakes and tsunamis has long been known, and the occurrence of an earthquake in Japan does not make another one any more likely (if anything the opposite).
Similarly, terrorist attacks can and do happen anywhere. While there are countries where terrorism risks discourage most tourists – Afghanistan, Iraq, Nigeria and Syria being <a href="http://visionofhumanity.org/app/uploads/2019/11/GTI-2019web.pdf">the top four</a> – in most of the world no possible destination is more or less at risk than any other, and the risk remains even if you stay at home.
By contrast, the bushfire cataclysm has been unprecedented in terms of duration and the areas in southeast Australia destroyed. Sydney, Melbourne and Canberra were all cloaked in smoke.
The image of Australia as a clean, green destination for outdoor fun – promoted in an advertising campaign in Britain featuring Kylie Minogue even as the disaster raged – has been replaced by burnt-out landscapes where the next fire may be even worse than the last.
The Australian government’s handling of the issue has added to negative perceptions. International coverage of the bushfires has repeatedly mentioned the “<a href="https://www.washingtonpost.com/climate-environment/as-fires-devastate-australia-a-coal-loving-leader-faces-an-early-test/2020/01/08/a7827ebc-3178-11ea-91fd-82d4e04a3fac_story">coal-loving</a>” Australian government’s failure to deal with the fact its fossil fuel exports contribute to the conditions that make catastrophic fires more likely.
Washington Post <a href="https://www.bloomberg.com/opinion/articles/2020-01-06/bushfires-reap-what-australia-s-carbon-exports-have-sown">columnist David Ickling</a> put it like this:
"It’s a rude dose of reality for Prime Minister Scott Morrison, a former tourism-promotion bureaucrat whose lackadaisical, image-obsessed initial response to the fires has caused him to be lampooned on social media as #scottyfrommarketing."
"And yet a generation before Morrison came on the scene, Australia was already lying to itself and the world about its role in the climate change that has fuelled this disaster. If any goodness can sprout from the devastation of these fires, it will start with a more honest reckoning about how successive governments have sold off Australia’s future for a handful of coal."
Finally, the bushfires affected as many tourists as locals. The fires in southern New South Wales and eastern Victoria in particular trapped thousands of tourists taking Christmas-New Year holidays in normally pleasant seaside resorts.
This is not usually the case with disasters, with some exceptions. Most of the 202 people killed in the 2002 Bali bombings were tourists, for example, as were the majority of more than 4,000 people killed in Thailand by the Boxing Day tsunami.
Memories will fade over time, at least until they are rekindled by another disaster. But we should not expect this to happen quickly. The damage the bushfire catastrophe has caused to Australia’s position in the international tourism market is likely to last for years to come.<img src="https://counter.theconversation.com/content/131894/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
<a href="https://theconversation.com/profiles/john-quiggin-2084">John Quiggin</a>, Professor, School of Economics, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/this-time-is-different-australias-tourist-numbers-may-take-years-to-recover-131894">original article</a>.
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This time is different, Australia's tourist numbers may take years to recover

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As the east coast bushfire crisis finally abates, it’s easy to see nothing but loss: more than 11 million hectares of charcoal and ash, and more than a billion dead animals.
But it is heartening to remember that bushfire can be a boon to some plants and animals. We’re already seeing fresh green shoots as plants and trees resprout. Beetles and other insects are making short work of animal carcasses; they will soon be followed by the birds which feed on them.
Australia’s worsening fire regimes are challenging even these tolerant species. But let’s take a look at exactly how life is returning to our forests now, and what to expect in coming months.
<img src="https://images.theconversation.com/files/315625/original/file-20200217-10985-gmpykj.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Life is returning to fire-ravaged landscapes. Flickr, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank">CC BY</a>
<h2>The science of resprouting</h2>
Of course, bushfires kill innumerous trees – but many do survive. Most of us are familiar with the image of bright green sprouts shooting from the trunks and branches of trees such as eucalypts. But how do they revive so quickly?
The secret is a protected “bud bank” which lies behind thick bark, <a href="https://nph.onlinelibrary.wiley.com/doi/full/10.1111/nph.12001" target="_blank">protected from the flames</a>. These “epicormic” buds produce leaves, which enables the tree to photosynthesise – create sugar from the sun so the tree can survive.
Under normal conditions, hormones from shoots higher in the tree suppress these buds. But when the tree loses canopy leaves due to <a href="https://www.nature.com/articles/ncomms1191" target="_blank">fire</a>, drought or insect attack, the hormone levels drop, allowing the buds to sprout.
<h2>Insect influx</h2>
This summer’s fires left in their wake a mass of decaying animal carcasses, logs and tree trunks. While such a loss can be devastating for many species – particularly those that were already vulnerable – many insects thrive in these conditions.
For example, <a href="http://forensicentomologist.com/wp-content/uploads/2008/06/4.pdf" target="_blank">flies</a> lay eggs in the animal carcasses; when the maggots hatch, the rotting flesh provides an ample food source. This process helps break down the animal’s body – reducing bacteria, disease and bad smells. Flies are important decomposers and their increased numbers also provide food for birds, reptiles and other species.
Similarly, <a href="https://theconversation.com/wood-beetles-are-natures-recyclers-with-a-little-help-from-fungi-76029" target="_blank">beetles</a> such as the <a href="https://www.anbg.gov.au/gardens/visiting/exploring/fauna/insects/beetles-ANBG" target="_blank">grey furrowed rosechafer</a>, whose grubs feed on decaying logs and tree trunks, add nutrients to the soil when they defecate which helps plants grow again.
<a href="https://www.sciencedirect.com/science/article/abs/pii/S0378112705003130" target="_blank">Insects also benefit</a> from the mass of new leaves on trunks and branches. For example, native <a href="/news">psyllids</a> – an insect similar to aphids – feed on the sap from leaves and so thrive on the fresh growth.
<img src="https://images.theconversation.com/files/315623/original/file-20200217-10985-k5e7fc.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Animal carcasses are a sad consequence of bushfire, but provide a boon to some insect species. Sean Davey/AAP
<h2>Then come the birds</h2>
Once insects start to move back into an area from forested areas nearby, the birds that eat them will follow.
An increase in psyllids encourages honeyeaters – such as bell miners and <a href="https://ro.uow.edu.au/cgi/viewcontent.cgi?article=1145&amp;context=thsci" target="_blank">noisy miners</a> – to return. These birds are considered <a href="https://www.sciencedirect.com/science/article/abs/pii/S0378112705003130" target="_blank">pests</a>.
A <a href="http://www.publish.csiro.au/pc/PC970221" target="_blank">CSIRO study</a> after bushfires in Victoria’s East Gippsland in 1983 found several native bird species – flame and scarlet robins, the buff-rumped thornbill and superb fairy-wren – increased quickly to levels greater than before fire. As shrubs in the understorey regrow, other species will move in, slowly increasing biodiversity. 
Since the recent <a href="https://www.nbnnews.com.au/2019/11/12/watch-and-act-bushfire-burning-in-moonbi-north-of-tamworth/" target="_blank">bushfire in woodland near Moonbi in New South Wales</a>, numerous bird species have returned. On a visit over this past weekend, I observed currawongs landing in the canopy, saw fairy wrens darting in and out of foliage sprouting from the ground, and heard peep wrens in tufts of foliage on bark and high branches.
Honeyeaters moved between burnt and intact trees on the edge of the blackened forest and butterflies visited new plants flowering after recent rain.
<img src="https://images.theconversation.com/files/315627/original/file-20200217-11023-c6ad0s.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
The presence of the currawong, while a pest species, shows birdlife is returning to the bush. Flickr, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank">CC BY</a>
<h2>Weeds can help</h2>
<a href="https://www.propertyobserver.com.au/https://www.sciencedirect.com/science/article/abs/pii/0006320795900616" target="_blank">Weeds</a> usually benefit when fire opens up the tree canopy and lets in light. While this has a downside – preventing native plants from regenerating – weeds can also provide cover for native animal species.
A study I co-authored in 2018 found highly invasive <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1442-8903.2011.00600.x" target="_blank">Lantana camara</a> provided habitat for <a href="https://www.publish.csiro.au/AM/AM17003" target="_blank">small mammals</a> such as the brown rat in some forests. Mammal numbers in areas where lantana was present were greater than where it was absent.
<a href="https://onlinelibrary.wiley.com/doi/full/10.1111/j.1365-3180.2011.00869.x" target="_blank">Lantana</a> often grows quickly after fire due to the increase in light and its ability to <a href="https://link.springer.com/article/10.1023/A:1009707404802" target="_blank">suppress</a> other plant growth.
<img src="https://images.theconversation.com/files/315628/original/file-20200217-10985-od7u07.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Lantana provides cover for animal species. Flickr, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank">CC BY</a>
<h2>Is there hope for threatened species?</h2>
Generalist species – those that thrive in a variety of environments – can adapt to burnt forest. But specialist species need particular features of an ecosystem to survive, and are far less resilient.
The critically endangered <a href="https://books.google.com.au/books?hl=en&amp;lr=&amp;id=hF2sMDVZztIC&amp;oi=fnd&amp;pg=PR7&amp;ots=5Uri8BWkcm&amp;sig=UKvmQHpO-9hWvqK5pYEfB6hSIEU&amp;redir_esc=y#v=onepage&amp;q&amp;f=false" target="_blank">Leadbeater’s possum</a> lives only in <a href="https://www.wildlife.vic.gov.au/our-wildlife/leadbeaters-possum" target="_blank">small pockets of forest</a> in Victoria.
It requires large fires to create a specific habitat: big dead trees provide hollows for shelter and nesting, and insects feeding on burnt wood and carcasses provide a food source.
But for the Leadbeater’s possum to benefit from the fire regime, bushfires should be infrequent – perhaps every 75 years – allowing time for the forest to grow back. If fires are too frequent, larger trees will not have time to establish and hollows will not be created, causing the species’ numbers to decline.
Similarly in NSW, at least 50% and up to 80% of the habitat of threatened species such as the vulnerable rufous scrub-bird was burnt in the recent fires, an environmental department analysis <a href="https://www.environment.gov.au/biodiversity/bushfire-recovery/research-and-resources">found</a>.
<h2>Looking ahead</h2>
Only time will tell whether biodiversity in these areas is forever damaged, or will return to its former state.
Large fires may benefit some native species but they also provide food and shelter for predatory species, such as <a href="https://theconversation.com/hunter-hunted-when-the-world-catches-on-fire-how-do-predators-respond-126280" target="_blank">feral cats and foxes</a>. The newly open forest leaves many native mammals exposed, changing the foodweb, or feeding relationships, in an ecosystem.
This means we may see a change in the types of birds, reptiles and mammals found in forests after the fires. And if these areas don’t eventually return to their pre-fire state, these environments may be changed forever – and extinctions will be imminent.
<a href="https://theconversation.com/profiles/kathryn-teare-ada-lambert-186436" target="_blank">Kathryn Teare Ada Lambert</a>, Adjunct Lecturer/ Ecologist, <a href="https://theconversation.com/institutions/university-of-new-england-919" target="_blank">University of New England</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/these-plants-and-animals-are-now-flourishing-as-life-creeps-back-after-bushfires-130293" target="_blank">original article</a>.
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These plants and animals are now flourishing as life creeps back after bushfires

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GUEST OBSERVATION
On the night of January 9 2020, my wife and I secured our Kangaroo Island home and anxiously monitored the South Australian Country Fire Service (CFS) website for bushfire advice.
After many horrific weeks of bushfires, the winds had again shifted, and the fire front began a slow, nightmarish march eastward into the island’s central farmlands. Official warnings advised that the entire island was potentially under threat.
<a href="https://images.theconversation.com/files/316070/original/file-20200219-11000-18pw4af.jpg?ixlib=rb-1.1.0&amp;rect=36%2C0%2C4788%2C2800&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/316070/original/file-20200219-11000-18pw4af.jpg?ixlib=rb-1.1.0&amp;rect=36%2C0%2C4788%2C2800&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Landsat-8 false colour image of southwest Kangaroo Island, showing active bushfires on January 9, 2020. Landsat-8, Author provided
As my good neighbours and volunteer firefighters headed off to battle the flames elsewhere on the island, I desperately wanted to find a way to help. With no firefighting training, I felt I physically had little to offer. But I reasoned that my skills and training in remote sensing and spatial science could potentially turn satellite information into useful maps to track the fires, in more detail than those provided by the Country Fire Service and <a href="https://sentinel.ga.gov.au/#/" target="_blank">Geoscience Australia</a>.
While I was ultimately successful, it wasn’t quite as straightforward as I thought. And what I learned about access to good-quality and up-to-date satellite bushfire information surprised me.
Free satellite imagery is abundant; useful information is not
In principle, there are many good sources of free satellite imagery. But selecting, sourcing, understanding and processing a multilayered satellite image into an accurate burnt area map takes technical know-how that is beyond the reach of the people who need it the most.
We are fortunate to live in a time where satellite images are constantly uploaded to the web, often within hours of acquisition. There are many reputable sources for this information, including <a href="https://worldview.earthdata.nasa.gov/" target="_blank">NASA Worldview</a>, <a href="https://earthexplorer.usgs.gov/" target="_blank">USGS Earth Explorer</a>, <a href="https://landlook.usgs.gov/" target="_blank">USGS LandLook Viewer</a>, and the <a href="https://apps.sentinel-hub.com/eo-browser" target="_blank">Sentinel EO Browser</a>.
These websites are gateways to the world of “big satellite data”, and I quickly found myself on a steep learning curve to efficiently navigate them and find recent imagery.
Once downloaded, the next hurdle I faced was how to process a data-rich satellite image into a meaningful and accurate map of the bushfire area. I scoured the internet for “how to” blogs, academic articles, spatial algorithms, and processing codes; these too are the products of much intellectual investment by global scientists, openly and freely available.
As a spatial scientist, I naturally found all this fascinating. But as a resident of an island under assault from bushfires, I also found it frustratingly time-consuming. I crashed my computer testing algorithms. I maxed out my hard drive. I spent hours on possibilities that turned out to be dead ends.
<a href="https://images.theconversation.com/files/316071/original/file-20200219-11017-129dntk.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/316071/original/file-20200219-11017-129dntk.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
True colour satellite imagery is often the most accessible and easily understood, but it often lacks sufficient detail to clearly identify burnt areas. In this Sentinel-2 true colour image, approximately 210,000 hectares are burnt, but bushfire-impacted areas are barely visible without advanced image processing. Sentinel-2, Author provided
Maps help to fight fires and recover from them
In the end, I produced <a href="https://blogs.adelaide.edu.au/environment/2020/02/19/researchers-kangaroo-island-fire-maps/" target="_blank">burnt area maps</a> from Sentinel and Landsat satellite images captured during the fires. I learned that this kind of information can indeed help firefighting and ecological recovery efforts, both during and after bushfires.
Initially I gave the maps to a group of farming friends who had been fighting fires around their properties for weeks. They told me the maps helped save time in assessing which areas had already burned, allowing them to focus on defending unburnt areas, and to make decisions on where to move livestock and install firebreaks.
The positive feedback inspired me to customise my processing techniques, so I could provide updates more quickly when new satellite images became available.
I embedded appropriate safety disclaimers into the maps and released them on Twitter and <a href="http://www.spatialpoints.com/category/blog/ki_fires/" target="_blank">Spatial Points</a>, a blog site managed by my research group at the University of Adelaide.
Within hours, I received messages that the maps were being used for ecological recovery efforts. The maps successfully highlighted remaining patches of habitat where endangered and vulnerable species had found refuge. Several government agencies even contacted me for burnt area information, which I’m told was used to assess infrastructure damage and habitat loss.
<a href="https://images.theconversation.com/files/316073/original/file-20200219-11023-gxgogg.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/316073/original/file-20200219-11023-gxgogg.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Processed Sentinel-2 satellite image. Red areas suggest burnt vegetation. Variation in red hues are caused by dominant vegetation type and soils. Sentinel-2/W. Boone Law, Author provided
National knowledge gap
My experience shows there is a swag of free and regularly updated satellite imagery available, which when interpreted and presented appropriately can potentially be hugely helpful to firefighting and recovery efforts.
However, I am concerned that neither the general public nor decision-makers seem fully aware of the range of satellite information on offer. Nor is there a good understanding of the advanced technical skills needed to access and process imagery into useful map data.
This leads me to wonder whether I have stumbled upon a glaring knowledge gap in Australia’s bushfire preparedness.
How can we overcome this technological and information bottleneck? I don’t propose to have all the answers, but I do believe it would be sensible for governments, industry and research agencies to invest in the kind of capabilities that I developed while trying to protect my own local community.
As Australia faces a future of more frequent and extreme bushfires, there will doubtless be many people who would be glad of this kind of information when they need it most.<img src="https://counter.theconversation.com/content/132087/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/wallace-boone-law-944308" target="_blank">Wallace Boone Law</a>, PhD Candidate, <a href="https://theconversation.com/institutions/university-of-adelaide-1119" target="_blank">University of Adelaide</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/i-made-bushfire-maps-from-satellite-data-and-found-a-glaring-gap-in-australias-preparedness-132087" target="_blank">original article</a>.
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I made bushfire maps from satellite data, and found a glaring gap in Australia’s preparedness

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GUEST OBSERVATION
When the central business district of Lismore was flooded in 2017, every small business owner in the northern New South Wales town had a decision to make. Should they rebuild their businesses, or take whatever insurance money they might get and move on?
I know one who contemplated giving it all away. His shop had been completely inundated. What was the point, he wondered, if it could all happen again in another few years?
He did decide to rebuild, though. More than that, he resolved to build back better, to be better prepared for the next flood. He replaced water-damaged carpets with marine grade carpet, and plasterboard with concrete. He had shelving attached to hoists, and other cupboards on wheels.
In the wake of this season’s bushfires, many small businesses will face the same decision – whether to rebuild, and then how to “build back better”. It’s a question that should also be getting attention in the national capital from public servants and political leaders.
Preparing for future risks
This week Prime Minister Scott Morrison <a href="https://www.pm.gov.au/media/address-national-press-club" target="_blank">spoke about the need</a> to “prepare for and adapt to the environment and the climate we are going to be living in”.
“Building back better” is a crucial part of increasing resilience. It is one of the four key principles of the United Nation’s <a href="https://www.undrr.org/implementing-sendai-framework/what-sf" target="_blank">framework for disaster risk reduction</a> (endorsed in Sendai, Japan, in 2015). It stresses the benefit of using the post-disaster recovery and reconstruction phase to better prepare for future risks.
For a small business, doing so just isn’t just about restoring a premises that might have been destroyed or damaged. Building back better means looking at the business in its totality. This includes relationships with suppliers, customers and staff.
In this regard, building back better should be something done by every small business in a community affected by a disaster. Because all businesses tend to be affected indirectly even if they don’t have to deal with a direct impact. We have seen just how far and wide those indirect effects are in recent weeks, with businesses that depend on tourism <a href="https://www.sbs.com.au/news/tourism-industry-suffers-as-bushfire-images-scare-off-international-travellers" target="_blank">facing a downturn</a> despite not being in a fire-ravaged area.
Economic costs
Just as it costs more to <a href="https://theconversation.com/a-crisis-of-underinsurance-threatens-to-scar-rural-australia-permanently-129343" target="_blank">replace a home destroyed in a bushfire</a> with a building whose design and a materials are more fire-resistant, it take more resources for a small business owner to build back better.
Nor are the costs just financial – getting expert advice plans, finding skilled tradespeople and so on. There are emotional pressures too. There can be a strong motivation to put things back just as they were not just because it seems the quickest route to getting back to normal – and to that all-important cash flow – but also because it is psychologically less taxing.
In the ten years to 2016, the total economic cost of natural disasters in Australia averaged A$13.2 billion a year, according to 2017 modelling by Deloitte Access Economics for the <a href="http://australianbusinessroundtable.com.au/assets/documents/ABR_building-resilience-in-our-states-and-territories.pdf" target="_blank">Australian Business Roundtable for Disaster Resilience &amp; Safer Communities</a>. It projects the economic cost to grow to A$39 billion a year in 2050.
The small business sector disproportionately shoulders these costs, with significant personal and social consequences. If a business in a small town fails to reopen, it create a vicious cycle, reducing trade for neighbouring businesses and hurting the prosperity of the local community. Throughout regional Australia there are examples of small communities – such as <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2015-01-12/black-saturday-infrastructure-marysville-cautionary-tale-sa-fire/6013114" target="_blank">Marysville, Victoria</a> – that never really recovered from past disasters.
Despite how important small businesses are to the economy, and in particular to the prosperity of regional and rural communities, government recognition of the need to assist them remains a work in progress.
For the current bushfire crisis, the federal and relevant state governments are <a href="https://www.business.gov.au/news/bushfire-support#small-business-recovery-package" target="_blank">offering small business</a> “recovery grants” of up to A$50,000 and “concessional loans” of up to A$500,000. To be eligible, though, a business must suffer direct damage. After rebuilding and replacing equipment, even with insurance money as well, there’s often little to invest in building back better.
For the many more small businesses indirectly affected – losing revenue for days, weeks or even months – there is minimal government assistance. The federal, state and territory governments have talked about financial measures that will extend to businesses with indirect impacts as a result of the bush fires, but in reality the support is going towards <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-01-19/federal-government-announces-bushfire-recovery-tourism-package/11880114" target="_blank">tourism campaigns and events</a>.
If governments truly believe small and family businesses are the engine room of the economy, (as <a href="https://www.propertyobserver.com.au/https://twitter.com/scottmorrisonmp/status/1116626191023128579?lang=en" target="_blank">Scott Morrison has said</a>), it’s time to put their needs on the table in post-disaster reconstruction plans. The current assistance and funding packages are not enough, not available to all affected businesses, and don’t help these businesses come back better than before.<img src="https://counter.theconversation.com/content/130871/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/samantha-sharpe-92884" target="_blank">Samantha Sharpe</a>, Research Director, Institute for Sustainable Futures, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936" target="_blank">University of Technology Sydney</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/disaster-hits-small-business-in-many-ways-we-need-a-national-strategy-to-help-them-adapt-130871" target="_blank">original article</a>.
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Disaster hits small business in many ways, we need a national strategy

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GUEST OBSERVER
Bushfires have killed <a href="https://www.theguardian.com/australia-news/2020/jan/24/bushfires-death-toll-rises-to-33-after-body-found-in-burnt-out-house-near-moruya" target="_blank">33 people</a> and destroyed nearly 3,000 houses across Australia so far this fire season. Canberra is under threat right now.
It isn’t only houses. Significant commercial buildings have been destroyed, among them Kangaroo Island’s iconic <a href="https://www.smh.com.au/national/there-s-just-nothing-left-iconic-tourist-site-will-rebuild-as-fires-threaten-premiums-20200110-p53qed" target="_blank">Southern Ocean Lodge</a>.
In New South Wales alone, <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-01-16/nsw-fire-affected-schools-will-be-safe-for-returning-students/11870494" target="_blank">140</a> schools have been hit. Many require <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-11-29/wytaliba-students-return-to-classroom-after-bushfire/11746188" target="_blank">extensive</a> work.
The <a href="https://www.abcb.gov.au/Connect/Categories/National-Construction-Code" target="_blank">National Construction Code</a> provides false, and dangerous, hope.
It requires new homes (Class 1 buildings) built in declared “bushfire-prone” areas to be built to either <a href="http://www.as3959.com.au/" target="_blank">Australian Standard 3959</a>, the National Association of Steelframed Housing standard “<a href="https://www.nash.asn.au/shop/product/nash-standard-for-steel-framed-construction-in-bushfire-areas/" target="_blank">Steel Framed Construction in Bushfire Areas</a>”, or a “performance solution”, which could be anything that in the opinion of a qualified person complies with the performance requirements of the code.
It also applies to Class 2 buildings (apartments) and Class 3 buildings (hotels and guesthouses) in bushfire-prone areas.
Disturbingly, the code does not apply to community buildings, such as schools.
The standard does not fireproof buildings
The definition of “bushfire-prone” varies from state to state, as do the procedures for enforcing it.
Confused? So are many construction professionals.
The sad truth is that any practical building that is exposed to an intense bushfire will probably burn down, whether it complies with Australian Standard 3959 or not.
Worse still, the available evidence suggests there is a significant risk that the people sheltering in it will not survive without an effective refuge, which Australian Standard 3959 does not mandate or consider.
The standard speaks for itself:
Although this Standard is designed to improve the performance of buildings when subjected to bushfire attack in designated bushfire-prone areas, there can be no guarantee that a building will survive a bushfire event on every occasion. This is substantially due to the unpredictable nature and behaviour of fire and extreme weather conditions.
More importantly, while a building constructed to Australian Standard 3959 might be less likely to burn down, Standard 3959 in its current form might not protect the people within the building.
Worse, it might not protect people
The highest aim of any system of building regulation ought to be life and safety, followed by the protection of adjoining properties and then, a long way back, by the protection of the property itself.
In the case of bushfire, the <a href="https://abcb.gov.au/">Australian Building Codes Board</a> and its political masters appear to have put the protection of buildings first, when it should be last.
If a house is under threat by bushfire, the best advice is to evacuate early, whether it complies with Australian Standard 3959 or not.
By encouraging people to believe they can defend a structure compliant with Australian Standard 3959 we could be putting more people at risk than if we simply told them to evacuate.
Residents and firefighters defending houses have accounted for a large percentage of the deaths this fire season.
It’d be better to rethink where we build
We may need to have difficult conversations about whether our subdivision practices are appropriate. Allowing people to build in areas that are bushfire-prone, particularly where buildings are effectively built into the bush, might be creating unmanageable problems for the future.
If there is no such thing as a bushfire-proof house, as Australian Standard 3959 seems to concede, we might need to focus on evacuation and shelters.
In the United States, rather than requiring houses to resist tornadoes or wildfires, the Federal Emergency Management Agency encourages the provision of shelters. State and local authorities often make these mandatory.
People are more important than structures
Having attended one funeral for a person killed defending their home this fire season, I have had enough. We should not be worrying about protecting buildings until we have worked out how to protect human life.
The <a href="https://www.industry.gov.au/regulations-and-standards/building-and-construction/building-ministers-forum">Building Ministers’ Forum</a> and the <a href="https://abcb.gov.au/">Australian Building Codes Board</a> should either embrace a policy of early evacuation or mandate fire shelters in bushfire-prone areas for both new and existing houses.
The board and the states should also make every effort to regulate to ensure all buildings and places designated as refuges of last resort can properly fulfil their intended function, whether they are new or not.
If we are going to have another fire season similar to this year, and so far the CSIRO predictions on this have been totally accurate, we will need to sort this out quickly, preferably before next summer.<img src="https://counter.theconversation.com/content/130165/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/geoff-hanmer-90647">Geoff Hanmer</a>, Adjunct Lecturer in Architecture, <a href="https://theconversation.com/institutions/unsw-1414">UNSW</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/building-standards-give-us-false-hope-theres-no-such-thing-as-a-fireproof-house-130165">original article</a>.
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Building standards offer false hope, fireproof houses don't exist: Geoff Hanmer

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NAB data mapping suggests that the ABS retail trade measure will fall 0.1% m/m in December following a gain of 0.9% in November.
The ABS printed a 0.9% gain in November, while NAB forecast 0.6% (revised to 0.5%). The strong November print is likely a result of the relatively new Black Friday sales bringing forward Christmas spending into November. 
Beyond technical questions around seasonal factors, this points to ongoing weakness in the retail sector amid high consumer debt levels and sluggish wage growth.
It is unlikely that the sector will see a sustained lift any time soon. On the contrary, the catastrophic bushfire season may further damage consumer confidence in January and February.
Click <a href="https://www.propertyobserver.com.au/images/2020/1/22/NAB%20Retail%20Index%20DEC.JPG" target="_blank">here</a> to enlarge:
<img src="https://www.urban.com.au/images/2020/1/22/NAB%20Retail%20Index%20DEC.JPG" alt="">
NAB Group Chief Economist Alan Oster said, "the retail sector has numerous fundamental issues; unemployment is set to edge higher, sluggish wage growth and elevated consumer debt continue to dampen consumer sentiment, despite interest rate cuts and higher house and share prices."
"In parallel to our standard mapping equations, we are running an experimental methodology. This alternative methodology forecast a bigger rise in November and an even weaker result in December."
"If anything, our December forecast has downside risk."
"The current bushfire season – underway since September – is a national tragedy. The local economic impact in bushfire-affected areas has been extreme."
"While it is unlikely that the fires were a major influence on the national December retail data, there may be much more substantial second round impacts in January and February," he concluded.
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Weakness in the retail sector exacerbated by bushfires: NAB

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EXPERT OBSERVER
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The Australian bushfire season that began in September has been horrific with more than 7 million hectares of bush destroyed, more than 25 deaths, significant loss of livestock, estimates of more than a billion wildlife animals killed and more than 1800 homes destroyed. More than 200 fires are still burning. Following the intensification of the bushfires over the Christmas/New Year period attention has now turned to the impact on the economy. This note looks at the key impacts. 
Physical disasters invariably cause a brief disruption to economic activity as measured by GDP followed by a boost as wealth destroyed by the disaster is rebuilt. In this sense measured across a year or so they are often seen as positive for economic growth, albeit this seems perverse particularly for those directly impacted.
The damage to property and wealth flowing from the bushfires will likely run into many billions. For example, the Victorian Black Saturday bushfires are estimated to have cost $4.4bn, whereas the current fires have covered an area 15 times bigger. So there will be a very big rebuilding boost to economic activity to come once the fires are brought under control. But the fires have been very widespread, have been going on for several months now and the crisis is continuing, so there will be a significant short-term negative impact and it likely will involve more than a short-term disruption to economic activity. 
- Activity related to farming, manufacturing, transport, tourism and business generally in the affected areas will be disrupted – this will involve around 2-3% of the population and will be concentrated around the March quarter. It will also be partly offset as affected people have to undertake spending that they otherwise wouldn’t have had to.
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- A bigger impact on economic activity is likely to come via a hit to consumer spending as the constant news of the fires and the smoke haze in several capital cities weighs on confidence. Australians were already very hesitant about the economic outlook after the slowdown in growth seen last year and continuing weak wages growth and high underemployment. A Roy Morgan survey released late last year found that 40% of Australians thought that 2020 will be worse than 2019, which is the worse reading since the early 1990s recession. At the same time a record-low 12% thought it would be better resulting in a net negative reading of 28% which is the worst in the survey’s 40-year history.
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- This may exaggerate how bad things really are. The economy is still in far better shape than it was at the time of the early 1990s recession (I was there, I remember!). But a combination of more negative news flow today due to the rise of social media, more divisive politics and expectations rising faster than reality may be altering perceptions of the economy in a negative way and exaggerating the gloom. Nevertheless, a range of other surveys also show that consumers are uncertain and depressed, and this looks to have intensified since Christmas. The constant terrible news since October about the bushfires along with the smoke in cities is likely weighing further on the national psyche adding to weakness in consumer spending as Australians feel less motivated to spend when their fellow Australians are suffering. The hit to household spending power from higher prices for food and a likely rise in insurance premiums flowing from the fires will only accentuate this. 
- Inbound tourism is also likely to be impacted by the heavy coverage of the bushfires globally – with ridiculous maps showing much of Australia on fire (including where I am right now) – likely to adversely affect perceptions of Australia. This may be short lived (just as the positive boost from the 2000 Olympics was) but it could still last a year or so.
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Taken together we expect a detraction from GDP due to the bushfires of around 0.4% starting in the December quarter but mainly impacting the March quarter before a rebuilding boost kicks in from the June quarter. Given the uncertainty, the range around this negative impact is -0.25% up to a worse case of - 1% of GDP should the fires continue on a widespread basis through the rest of summer. The rebuilding boost should reverse much of this drag later in the year, but there is considerable uncertainty around this as the impact on tourism and consumer spending may linger longer. 
A big proximate contributor to the severity of the bushfires is the severe drought gripping much of Australia. This has already driven a decline in agricultural production, which has been directly detracting around 0.2 percentage points from GDP growth for the last two years. Unfortunately, the Southern Oscillation Index is still in El Nino territory pointing to ongoing relatively dry conditions in eastern and top-end Australia. 
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More policy stimulus 
With the bushfires likely to contribute to a flow of weak economic data for the next several months, questioning the RBA’s “gentle turning point” in the economy and resulting in a movement away from the achievement of the RBA’s full employment and inflation goals, the fires have only added to the pressure for more policy stimulus. We remain of the view that the RBA will cut the cash rate to 0.5% in February (with the market probability now up to 53.4% from a low of 36% before Christmas) and to 0.25% probably in March. The bushfires will push up food prices and insurance premiums but the RBA’s focus on underlying inflation will mean that it should look through this. In fact, increases in such prices will act as a tax on consumer spending power and are negative for spending and so could depress underlying inflation. 
The pressure for further fiscal stimulus has also intensified. The Federal Government has already committed an additional $2bn for bushfire recovery to be spent this year and next (which is relatively small at 0.05% of GDP per year) and the NSW Government has committed another $1bn. However, the total hit to government budgets from the bushfires is likely to be much greater than this given assistance under existing disaster programs, extra expenses associated with fighting the fires and the impact of slower growth in the short term on revenue flows. 
More broadly given the hit to confidence a circuit breaker is arguably needed to help boost economic growth. Monetary policy alone is unlikely to be enough. So there is a need for a broader fiscal stimulus – maybe in the form of a bring forward of the personal tax cuts, an increase in Newstart and broad based investment allowances. To have an impact it needs to be at least 0.5% of GDP (or around $10bn). 
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Rightly in the face of the pain caused by the bushfires the Government has relaxed the focus on achieving a budget surplus and it is now questionable as to whether it will be achieved this year and next. That is not a major problem in the relative scheme of things given the relatively good state of Australia’s public finances. 
Some longer-term challenges 
The bushfires pose a number of longer-term challenges. 
First, increased pressure to adopt a tougher stance in reducing carbon emissions. While Australia has always had droughts and bushfires we have been warned for more than a decade now that the world and Australia is getting warmer, that increasing global greenhouse gas emissions are likely contributing to this and that in the absence of actions to reduce emissions the world will get significantly warmer with the outcome being rising sea levels and more extreme weather events – including storms, floods and droughts – with more severe bushfires an outcome of the latter. 
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Second, the damage inflicted by the extreme bushfires highlights the need for investors to be aware of industries and businesses that are vulnerable to climate change risk – whether it comes from the physical impact from climate change or via measures to reduce emissions. 
Thirdly, the severity of the bushfires and the risk that this is the new normal will necessitate better strategies for reducing the risk to property posed by future bushfires. 
Finally, in the absence of policy action the bushfires risk accentuating the decline of some regional communities particularly where key industries have been destroyed by the fires – with some taking their insurance and rebuilding elsewhere. This will only further centralise Australia in its big cities adding to all the costs that entails – notably congestion and expensive housing. 
What does it mean for investors? 
The likelihood of more RBA monetary easing and continuing weak economic growth in the short term will likely keep Australian bond yields down relative to global bond yields, possibly pushing them lower. 
This will also keep the Australian dollar relatively soft. 
So far the Australian share market appears to be looking through the short-term hit to economic growth focusing more on the rebuilding boost, but the negative impact of the bushfires risks seeing it remain a relative underperformer versus global shares. 
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SHANE OLIVER is Head of Investment Strategy and Chief Economist at AMP Capital. 
Main photo credit: Andrea Schaffer
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soliver-smf6LQXgW9

Bushfires and the Australian economy: Oliver's Insights

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EXPERT OBSERVER
For 40 years I have studied bushfires in Australia. It has been my life’s work to try to better understand Australian landscapes and the interaction of humans and landscape fire.
As we contemplate a future where catastrophes like the one currently engulfing Australia become increasingly frequent, there’s an idea to which I keep returning: maybe it’s time to say goodbye to the typical summer Australian holiday.
Perhaps it’s time to rearrange Australian calendar and reschedule the peak holiday period to March or April, instead of December and January.
It’s easy to dismiss this idea as stupid but that’s the nature of adaptation. Things that once seemed absurd will now need serious consideration.
What’s truly absurd is the business-as-usual approach that sees thousands of holidaymakers heading directly into forests and national parks right in the middle of peak bushfire season.
All of the indications are that we are galloping into changing fire regimes. We can certainly see that with what’s occurred in the Australian alps (the snow country in southeastern Australia, near Mount Kosciuszko). There were incredibly intense fires there <a href="https://www.smh.com.au/national/fires-fanned-by-worst-imaginable-conditions-20030131-gdg702" target="_blank">around the early 2000s</a> and now those areas are re-burning.
To me, as a fire researcher, that’s an astonishing thought.
Yes, there have been very large fires in the past but they weren’t followed up with yet more very large fires a mere 15 years later. Normally, you’d be <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/gcb.12433" target="_blank">expecting</a> a gap of <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/geb.12484" target="_blank">50 or 100 years</a>. So the ecology is telling us that we are seeing the intervals between the fires shrinking. That is a really big warning sign.
And this increasingly frequent fire activity is completely consistent with what climate modelling was <a href="https://www.publish.csiro.au/WF/WF13126" target="_blank">suggesting</a>. The whole system is moving to a world that is hotter, drier, and with more frequent fire activity. It’s what was <a href="https://www.environment.gov.au/climate-change/adaptation/publications/fire-regimes" target="_blank">forecast</a> and it’s what is now happening.
<h2>Big holidays in peak fire season</h2>
One of the great exacerbating factors of this crisis is the fact that it’s occurring in a holiday period. It makes things incredibly difficult for emergency management. The fact is that it would be a lot easier for firefighters to focus on stemming fires if they didn’t also have to manage mass evacuations, and deal with populations that are dispersed and far from home.
Scheduling the major Australian holiday at the same time as bushfire season also makes things extremely difficult for the enterprises that depend on the holiday trade. You need certainty to run a business and timing the major annual Australian holiday period with bushfire season strips certainty away from these business owners.
It’s also really terrible for holidaymakers themselves. People are in desperate need of a break, to spend time with family. Instead of returning to work rested and re-energised, many will be stressed, tired, perhaps even traumatised. (And let’s not forget the firefighters themselves, also denied a break with friends and family over the holidays).
And having the major holiday right in the middle of bushfire season also means that many people are denied a chance to experience national parks, as authorities close them off to reduce risk.
<h2>Adaptation means change, and change is hard</h2>
The old idea was that we can head off the crisis by reducing our emissions through decarbonisation. We had an opportunity to do that and we didn’t take it. We still have to decarbonise but now we also have to adapt.
And the sort of adaptation needed is not just about infrastructure, it’s also about the way we shape our lifestyle, our culture and traditions.
Climate change adaptation will nearly always be met with political, social and cultural resistance. It is not easy. But something like completely rearranging the Australian calendar around increased risks – it’s not even the biggest change required of us.
Some of the other things we are going to have to do will at first seem absurd, will be unbelievably painful economically and will require major adjustments.
There’s going to need to be a systematic change in behaviour and lifestyle as we adapt.
This crisis occurring in peak holiday time is highlighting the fact that the assumptions of normality we have got are being challenged by climate change.
It is confronting, but adaptation also brings with it great benefits – less loss of life, greater certainty and opportunity for businesses and holidaymakers, and smoother handling of fire crises as they emerge.
We need to put some serious thought into what future life will be like under climate change. Perhaps shifting peak holiday season to the cooler months is the place to start.<img src="https://counter.theconversation.com/content/129337/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
<a href="https://theconversation.com/profiles/david-bowman-4397" target="_blank">David Bowman</a>, Professor of Pyrogeography and Fire Science, <a href="http://theconversation.com/institutions/university-of-tasmania-888" target="_blank">University of Tasmania</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/as-bushfire-and-holiday-seasons-converge-it-may-be-time-to-say-goodbye-to-the-typical-australian-summer-holiday-129337" target="_blank">original article</a>.
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As bushfire and holiday seasons converge, it may be time to say goodbye to the typical Australian summer holiday

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EXPERT OBSERVER
Sydney is currently blanketed by smoke haze from severe bushfires that have burned through New South Wales.
Air pollution levels on Thursday reached <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-11-21/sydney-smoke-from-fires-unlikely-to-clear-today-authorities-warn/11723876" target="_blank">hazardous levels</a> for the second time in a week. The NSW Rural Fire Service has warned that haze could be around for days.
On Thursday, several locations in Sydney had air quality index levels above 1,000. Anything over 200 is considered hazardous. Health authorities in Sydney have asked children to stay indoors.
You might be surprised to hear that while air pollution is <a href="https://www.who.int/health-topics/air-pollution" target="_blank">bad for our health</a>, it can also be bad for the economy.
In our forthcoming study in the <a href="https://fbe.unimelb.edu.au/research/streams/decision-making-and-markets/market-impact-of-chinese-haze-events" target="_blank">Journal of Corporate Finance</a> we show that air pollution impairs forecasts by financial analysts. This has implications for our financial system, which relies on accurate and timely information.
Air pollution has been <a href="https://www.theguardian.com/environment/2016/may/12/air-pollution-rising-at-an-alarming-rate-in-worlds-cities" target="_blank">rising worldwide</a>. Currently, four in every five city dwellers are exposed to dangerous levels of outdoor pollution. We know that as well as harming physical health, it hurts <a href="https://www.aeaweb.org/articles?id=10.1257/aer.102.7.3652" target="_blank">worker productivity</a>.
We investigated whether it also harms the decision-making ability of financial analysts. This is important because their reports play a crucial role in the functioning of capital markets.
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Beijing smoke haze, November 2018. ROMAN PILIPEY/EPA
China is an ideal place to study it.
Over the past 20 years China has faced severe air pollution, including the infamous “<a href="https://qz.com/159105/2013-will-be-remembered-as-the-year-that-deadly-suffocating-smog-consumed-china/" target="_blank">airpocalypse</a>” which struck Bejing in 2013, when average air quality levels remained hazardous for much of the year.
Recently China has made headway in reducing air pollution, but it remains a significant issue.
China is not alone – emerging and developing nations such as Brazil, India and Iran face similar problems – so our study is useful for understanding the economic effects of pollution elsewhere.
We examined the pollution levels in different cities on the days Chinese companies announced their earnings.
<h2>The more hazy the location, the more hazy the thinking</h2>
Most Chinese companies are followed by analysts in a number of Chinese cities. On earnings days, some are experiencing haze and others are not.
We were able to examine more than 59,000 publicly available forecasts from more than 2,000 analysts. We used published phone numbers to identify their locations.
We found those that were exposed to haze produced less bold forecasts, less timely forecasts, and less accurate forecasts
Analysts exposed to pollution were
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4.8% less likely to differentiate their forecasts from those of other analysts
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4% less likely to incorporate the new information from the announcements into their forecasts
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14% less likely to revise their forecasts at all within two days the announcements.
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<h2>Hazy thinking matters</h2>
We are not sure why. We know that air pollution has negative effects on physical health and <a href="https://www.propertyobserver.com.au/https://www.ncbi.nlm.nih.gov/pubmed/25673816">mood</a> and we know that financial analysts are exposed to pollution not only when outside, but also at home and in the office, since filtering systems <a href="https://www.propertyobserver.com.au/https://www.tandfonline.com/doi/abs/10.1080/02786820117903" target="_blank">cannot completely clean the air</a>.
Investors rely on analysts to provide information. Earnings announcements are key information events. Poor forecasts resulting from those events are an indirect negative effect of high levels of pollution.
Those indirect negative effects might be widespread, extending as far as manufacturing, schools and services industries. They add to the case for cleaning up air.
<a href="https://theconversation.com/profiles/naomi-soderstrom-892532" target="_blank">Naomi Soderstrom</a>, Professor of Accounting and Deputy Head of Department, <a href="http://theconversation.com/institutions/university-of-melbourne-722" target="_blank">University of Melbourne</a> and <a href="https://theconversation.com/profiles/chao-kevin-li-892606" target="_blank">Chao Kevin Li</a>, Lecturer School of Accounting, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/smoke-haze-hurts-financial-markets-as-well-as-the-environment-127511" target="_blank">original article</a>.
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