Powered by MOMENTUM MEDIA
realestatebusiness logo
Powered by MOMENTUM MEDIA
realestatebusiness logo
Subscribe to our newsletter SIGN UP

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Is climate change impacting real estate prices?

07 November 2019 Lyall Russell
Beach-front properties

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.

Advertisement
Advertisement

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 dont believe in climate change, you might say, ‘You guys are crazy. Climate change isnt 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 theres disagreement, but it could be that the deniers are right, or it could be that the believers are right. Or it could be that theyre both wrong,” he said.

“All our study says is that they cant all be right.”

Is climate change impacting real estate prices?
beach properties reb
lawyersweekly logo
FROM THE WEB
Recommended by Spike Native Network
Do you have an industry update?
REAL ESTATE BUSINESS NEWSLETTER
Ensure you never miss an issue of the Real Estate Business Bulletin. Enter your email to receive the latest real estate advice and tools to help you sell.