Under the worst-case, high-emissions scenario in which global temperatures rise by 3 per cent, the risk assessment found $571 billion in value would be wiped from the property market in the next five years alone.

That hit would increase to $611 billion by 2050, and $770 billion by the end of the century, the risk assessment found.

Australians have a huge proportion of their wealth tied up in property, with it accounting for about two-thirds of all household assets.

The combined worth of all the country’s property is currently sitting at $11.5 trillion.

The risk assessment also painted a bleak picture for the affordability and availability of insurance for homeowners wanting to safeguard their holdings.

“Climate change is expected to drive escalating economic costs across all communities,” the report states.

“Sea level rise will intensify coastal flooding and erosion, exacerbate flood and tropical cyclone impacts, and increase the severity and frequency of extreme events.

“These changes will notably increase insurance costs, leading to more underinsured or uninsured properties.”

Climate Change Minister Chris Bowen said the report showed the need for Australia to act against the danger posed by the warming planet.

“We are not working on reducing emissions for fun, the path to net zero is important, we are doing it because the impacts of our country are real,” he said.

“Importantly, the worst impacts are still avoidable.

“We are living climate change now; it’s no longer a forecast, projection, or prediction, it is a lived reality… but it’s not too late to avoid the worst of the impacts.

“As the report makes clear, the difference in terms of impact between 1.5 and 2 degrees, let alone three, is very real for Australia.

“So our efforts on mitigation must and will continue.”

Following the report, the government is expected to hand down its emissions reduction target for 2035 later this week.