SYDNEY (Reuters) - Australians Lesley and Doug McGrath have for decades battled ocean swells that have eaten away at the backyard of their multi-million dollar Sydney home.

They bought an old beach shack on Collaroy Beach in 1976 and replaced it with a two storey home anchored to the land by 12 meter (35 feet) long piers, a concrete slab, and an underground seawall of giant boulders.

Even with all that protection, the fury of the ocean has at times torn up their backyard, large chunks of prime real estate disappearing under waves. With scientists predicting a 90cm (3 feet) sea level rise in Sydney by 2050 due to climate change, the house itself may yet be in danger.

The McGrath home is one of an estimated 700,000 plus coastal properties in Australia alone that are threatened by rising seas.

Around the world, owners of prized seaside properties face the prospect of not just losing their homes but receiving no compensation as insurance policies may not cover climate change losses in the future.

"If you live in paradise you accept what the ocean gives and takes. We're not worried," Lesley McGrath told Reuters.

Her family photo album tells an amazing story of their battle against the ocean: At times, an expansive beach separates their home from the sea, and at other times, the surf is so close that photos show her son jumping into the water from the backyard.

Sea levels are widely expected to rise about one meter (3.3 feet) this century due to climate change, faster than the 18-59 cms (7-23 inches) outlined in a United Nations Climate Panel report in 2007.

And coastal communities around the world are already feeling the destructive effects of more frequent and violent ocean storms -- a portent of rising seas.

Powerful storms along China's coast are washing salt onto farmland, severely reducing crop yields and there are fears saltwater may be contaminating vital fresh water aquifers.

The first wave of climate change refugees have started leaving their island homes in the South Pacific as storm surges contaminate fresh water supplies and flood coastal crop lands.

"We have a feeling of anxiety, a feeling of uncertainty because we know that we will be losing our homes. It's our identity. It's our whole culture at stake," says Ursula Rakova, from Carteret Island off Bougainville in Papua New Guinea.

Carteret islanders have decided to abandon their island home for the nearby and bigger Bougainville island after years of worsening storm surges and king tides infected their fresh water supplies and ruined their staple banana and taro crops.

Other islanders tell stories of sitting and watching the ocean slowly devour their homes, and desperately trying to climate-proof their villages by constructing seawalls, planting mangroves to halt erosion and testing salt-resistant crops.

"We thought of ourselves as living on the coast. Now the house where I was born is a couple of hundred meters out to sea," says Kini Dunn from Togoru in Fiji.

Despite moving inland, the waves are again breaking on Dunn's doorstep, but he is determined not to leave.

"We can not see ourselves moving, even though the ground our ancestors trod is gradually disappearing into the sea," says a defiant Dunn.

LITIGATION MAY RISE WITH SEAS

John Vaughan is fighting in court for the right to try and save his multi-million dollar beach house.

Waves washed away 800 sq meters (8,600 sq feet) of Vaughan's beachfront land in May after a bad cyclone and storm season, wiping more than one million dollars off the value of the property, say real estate agents.

Vaughan fears that if he is not allowed to build a stone seawall, his home may one day become worthless. "I'd be on the edge of an island and washed away probably," he told Reuters.

Sydney Coastal Councils, which represents 15 local governments, says the multi-million dollar price tags of beachfront homes are unrealistic given climate change.

"A lot of those structures have been put in place without any consideration of climate change. Private properties in coastal areas don't reflect the risk," says Wendy McMurdo, chair of Sydney Coastal Councils.

In Australia, 711,000 homes and billions of dollars worth of assets and infrastructure are at risk from rising sea levels and storm surges, says Australia's climate change office.

Coastal flooding and erosion already costs Australia's most populous state New South Wales A$200 million a year.

Australia's coastal authorities fear litigation may rise as more and more people try to save their properties from storm surges and rising sea levels or lose property to the ocean.

"It's in no one's interest for decisions on the impact of climate change to be made by the courts," says McMurdo.

DEFEND OR RETREAT

Australia is an island continent with 80 percent of its 21 million people living on the coast, but combating rising sea levels is piecemeal, says McMurdo.

Australian authorities are split on adopting a policy of retreat or defend against rising seas.

Those opposed to defending the coast argue seawalls and breakwaters often see the beach lost to a stone structure, prevent the shoreline from naturally adapting to changing ocean conditions, and move the problem further along the coast.

Byron Bay, a resort town in Queensland state, has had a retreat policy for 20 years, angering residents who bought multi-million dollar beach homes in recent years.

One hour drive north, a defensive line of seawalls and years of pumping sand onto beaches has replenished the tourist Gold Coast, protecting them from powerful cyclones this year.

In Sydney, there is little chance of retreat given the high coastal population. A sea level rise of just 20 cms and a 1-in-50 year storm would see Narrabeen beach recede by 110 meters (361 feet) causing around A$230 million damages.

Sand pumping may help homes at Collaroy Beach, south of Narrabeen where the local council has a policy of buying threatened homes, bulldozing them and building protective sand dunes. In Sydney's south, a metal sea barrier has been planted at Cronulla Beach to stop wave erosion of an existing seawall.

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