Councils are increasingly vigilant about building on floodplains after several catastrophic events but NSW Premier Chris Minns says major changes will be implemented to ensure inappropriate approvals don't slip through.
Mr Minns said the state government would have more to say before the end of the year regarding Sydney's planning processes and whether it would consider banning new approvals on floodplains, particularly in the city's northwest.
"Part of the reason why the government is so focused on infill urban consolidation - that means more density close to the city - (is) because we acknowledge that with increasing immigration (and) more people coming into the Sydney basin, they have to go somewhere," he told reporters on Wednesday.
"If you keep adding a street to the western fringe of Sydney, then inevitably you're going to infringe on flood-prone land."
He could not guarantee there were no inappropriate approvals or substandard completions in the past year.
But he promised changes to ensure bad building approvals did not go ahead at scale.
A major think-tank warned on Wednesday people were blindly buying homes in areas of growing flood and climate change risk.
The Committee for Sydney report highlighted fault lines in state and federal governments' approach to disaster mitigation and emphasised the risks of continued development of flood-prone areas.
The Defending Sydney report said deciding to consider and measure climate risk in land-use planning was the first step to preparing for a changing climate.
"Sydney's at a crossroads," Committee for Sydney resilience director Sam Kernaghan said.
"We're up against a housing crisis and a climate crisis - our success in solving housing is going to be judged on whether more or less people are at risk of natural disasters like flooding."
Mr Kernaghan said relevant data was available but was often not made public or used to inform land-use planning.
Each disaster in recent years has caused a shift towards more homes being unable to be uninsured.
"People buying homes in these areas have no idea of the risk they're taking on, nor the costs being created for communities and government," Mr Kernaghan said.
Flooding is a key factor in the NSW government's focus on increasing density to boost housing supply, rather than continuing to build on Sydney's fringes.
Australia-wide, natural disasters are estimated to cost the economy $38 billion a year, with that projected to hit $73 billion by 2060.
Federal MP Susan Templeman, whose bushy electorate covers the Blue Mountains and the Hawkesbury, hoped the report triggered an "evolution of planning policy".
"As someone who represents a community in Greater Sydney that has been the worst hit by fire and flood in the past three years, I welcome the detailed work in this report," she said.
"We cannot assume 'she'll be right', when we see the frequency, severity and breadth of disasters that we've already experienced, particularly when insurance is out of reach for so many people."
