CLIMATE CHANGE A GROWING CONCERN
Potential natural catastrophes are changing the real estate landscape
Neighbourhood safety, proximity to work and a grocery store, transit friendliness, living close to family and walkability are among many people’s priorities when choosing where to buy a home. But more than half of Canadians say climate change is a factor in their decision.
According to a poll conducted by Leger for Re/max Canada, 57 per cent of respondents are considering possible climate catastrophes, such as severe flooding, wildfires and drought, when deciding where to move. Forty-nine per cent are worried about the impact forest fires, flooding and other climate change-related events will have on their neighbourhood and community over the next five years.
SEVERE WEATHER
Given the number of catastrophic floods and other severe weather events that have taken place across the country in recent years, that’s perhaps no surprise. And when our homes are at risk, our financial security is, too. Sixty-one per cent of Canadians believe real estate is the best longterm investment they can make and don’t see that changing over the next five years.
Those survey results are included in the second chapter of Re/max Canada’s Unlocking the Future: 5 Year Outlook, which focuses on climate change as a factor impacting Canadian real estate in the next five years. The chapter was released in partnership with Intact Centre on Climate Adaptation, University of Waterloo and Smart Prosperity Institute.
The report cites an Intact Centre report released in February that found flooding has pushed down housing prices in communities across Canada. Over the past eight years, catastrophic flooding in communities resulted in an average 8.2 per cent reduction in the final sale price of houses, 44.3 per cent reduction in the number of houses listed for sale and 19.8 per cent more days on market to sell a house.
Among other things, the Intact Centre report recommends the federal government develop a home flood-risk system based on postal code, which already exists south of the border. It also calls on all governments to commit to retaining and restoring natural infrastructure like forests, grasslands and wetlands to limit current and future flood risk.
LIST OF DISCLOSURES
Adding climate risk to a list of disclosures when selling a home is a logical step, maintains Elton Ash, executive vice president at Re/max Canada.
“It would help residents across Canada identify areas and neighbourhoods of resilience, which could drive additional investment, stronger livability, lower insurance premiums and a more resilient housing market in those regions,” he says in the report.
“But for it to work as intended, the information must be current and robust, and adaptation and mitigation investments need to be advancing in lockstep.”
The report concludes that both climate mitigation and adaptation measures are “integral” to improving housing affordability and livability and should be integrated into a national housing strategy over the next five years.
“The effects of climate change are increasingly colliding with federal and provincial government housing policies, which aim to significantly increase the country’s housing supply to rectify the chronic lack of inventory,” says Re/max Canada president Christopher Alexander. “Yet, the need to restore and retain green infrastructure, such as wetlands, and the immediate need to upgrade our hard infrastructure, particularly sewage systems, coupled with a decline in developable areas due to extreme weather, could make these goals difficult to achieve unless these factors are all integrated as one program.”
INFRASTRUCTURE INVESTMENTS
The federal government agreed “strong action is needed to help Canadians prepare for flood, wildfire,
drought, coastline erosion and other extreme weather events worsened by climate change.”
In its re-election campaign, it promised — among other things — to complete its work with provinces and territories to develop flood maps for higher-risk areas in the next three years and to take action to protect homeowners who are at high risk of flooding and don’t have adequate insurance protection by creating a low-cost national flood insurance program.
In the meantime, Alexander says it’s important to guide homeowners on how to take advantage of programs that already exist, such as the Climate Adaptation Home Rating program, in combination with things such as energy assessment throughout the homebuying journey.