The media is full of headlines about climate change and sea-level rise, but the news is not having a drastic impact on beachfront property values.
This week alone, more than 11,000 scientists from around the globe signed a scientific paper to declare a “climate emergency”. There was also a report out from scientists at the Australian National University concluding Antarctica ice melt is likely to drive sea-level rise.
If these predictions of sea-level rise become a reality, the highly sought-after beachfront home will be the first to go. But that has not seen prices go down.
This week, Domain revealed the most expensive suburb in Australia is Vaucluse in Sydney, with a median house price of more than $6 million, emphasising that people still desire waterfront properties.
A report from the University of British Columbia (UBC) Sauder School of Business uncovered why the value of some beachfront properties continues to increase.
The study looked at property in the US in areas at risk of climate change events.
It found that homes in areas that are predicted to be underwater by 2100 sold for 7 per cent more if the area was home to “climate change deniers” compared to “believers”.
“If everyone were to say, ‘I’m not buying beachfront property here because it’s going to get flooded’, then prices would collapse. But if you don’t believe in climate change, you might say, ‘You guys are crazy. Climate change isn’t a real thing, so I see a buying opportunity,’” study co-author Markus Baldauf said.
Although real estate agents estimate a property value on several factors, Mr Baldauf said when it came to climate change, nobody can accurately predict who is right.
“Which price is the appropriate one? We don’t know. Based on the data, all we can say is there’s disagreement, but it could be that the deniers are right, or it could be that the believers are right. Or it could be that they’re both wrong,” he said.
“All our study says is that they can’t all be right.”