A report for the Ministry for the Environment explored how many existing homes in New Zealand might be vulnerable to coastal inundation or inland flooding by 2060 and what they could be worth.
Thousands of homes were increasingly at risk because of climate change, the report said.
However, many homes in inundation or flood zones were not greatly at risk of significant damage.
Climate Sigma managing director Belinda Storey, who led the study, said the proportion that might be badly damaged was quite small, even for a place like South Dunedin, which was known to be vulnerable.
"A lot of our floodplains are very wide and shallow, and our floods aren’t particularly deep," she said.
Dr Storey said if a home was destroyed it typically did not make sense to rebuild there.
She also warned some properties were over-valued and their risks not adequately considered.
"The cost of addressing this issue is now more expensive than it would have been, because we’re not yet having those really difficult conversations."
A factor that stood out for Otago was the age of housing stock.
"On average, the housing stock in the floodplains in Otago was several decades older than the housing stock in other floodplains in New Zealand."
Dr Storey suggested this could in some ways be helpful for the region, as "you would be looking for renewal anyway".
The report focused on three scenarios — flooding that might damage 80% of a house, or get at least 3m above the ground floor level, a 50% damage threshold (water depth of 1.2m), and damage of at least 20% (or water depth of at least 30cm).
Estimates were made for the numbers of residential properties in coastal inundation and inland flood zones expected to be significantly damaged by at least one extreme event by 2060.
Nationally, the value of residential properties affected to this extent by such extreme weather could be between $1.8billion and $12.9b.
In Otago, the projection was for 200 to 1000 properties to be affected significantly, and they would collectively be worth between $100m and $700m.
For Southland, the scenarios spanned 70 to 500 properties, and their worth could add up to between $30m and $200m.
If climate change suddenly stopped next year, the estimates in the report would be reduced by about a third.
Dr Storey said adapting to the climate was going to be expensive, "so we need to be thoughtful about where we make those investments".
"There are some properties that have a time limit on them," she said.
"Climate change is putting a time limit on those properties.
"We shouldn’t be investing significant funds in properties that have got a time limit on them, because we’re going to need that money to help adapt other parts of our housing stock."
Otago Regional Council natural hazards manager Jean-Luc Payan said the report reinforced that adaptation responses would be critical in managing flood hazard risks as climate change became more prevalent.
The council had done its own natural hazard exposure analysis, which was more detailed.
Dr Payan said work happening or planned included such places as South Dunedin, the Clutha Delta and the head of Lake Whakatipu, and dealing with Roxburgh debris flow hazards and Lindsay Creek flooding hazards.
