new report<\/a> from the Intact Centre on Climate Adaptation at the University of Waterloo finds that flooding in Canada is\u00a0causing homes to sit on the market longer and sell for less value. Over the past eight years, flooding has led to an average 8.2 per cent reduction in the final sale price of a home.<\/p>\n\nFlooding also resulted in a 44.3 per cent reduction in the number of houses put on the market, while 19.8 per cent of properties spent more time waiting to sell. For instance, the median time to sell a house in Canada is 65 days, which in a flooded area, would mean an additional 13 days on the market.<\/p>\n
\u201cThis longer time frame may reflect caution on the part of buyers practicing due diligence when purchasing a house in a flood prone community,\u201d said the report.<\/p>\n
According to the study, 3.3 million Canadians live in 100-year floodplains and 3.9 million reside in 200-year floodplains. That number will likely increase as \u201cfloodplains expand in response to more extreme precipitation driven by climate change,\u201d in addition to natural infrastructure loss like grasslands and forests.<\/p>\n
\u201cThe findings of this report do not surprise me,\u201d said Gary Will of Will Davidson LLP in the report\u2019s press release. \u201cThey underscore the impact on housing prices and the need to actively reduce flood risk through updated floodplain modelling and mapping, and to re-think development, without delay, as flooding affects everyone from planners, homeowners to government decision-makers.\u201d<\/p>\n
The study examined five Canadian cities that had experienced catastrophic flooding between 2009 and 2020, including Grand Forks, Burlington, Toronto, Ottawa and Gatineau. The impacts of flooding were measured six months before and after the occurrence of a flood, and impacts were gauged by comparing changes in nearby non-flooded control communities over the same time period.<\/p>\n
For example, when Toronto experienced a flood in March 2019, the average sold price of a home grew 6.9 per cent in control, non-flooded communities, but only 3.6 per cent in flooded areas. Similarly, during Gatineau\u2019s May 2017 flood, prices sank 24.1 per cent in flooded communities, but only seven per cent in non-flooded areas.<\/p>\n
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SEE ALSO:<\/span>Housing starts stayed historically high, but trended lower in January: CMHC<\/a><\/strong>\r\n <\/div>\nFor the number of homes hitting the market during its April 2017 flood, Ottawa saw a 61.1 per cent increase in the number of homes on the market in flooded areas, compared to 108.1 per cent in controlled, non-flooded communities.<\/p>\n
The report also looked at the impact of flooding on mortgage arrears and deferrals in two cities for six months pre- and post-flooding. While the study found that homeowners’ ability to pay their mortgage did not change, a reduction in the appraised value of a house because of flooding did have an influence on lending by mortgage providers.<\/p>\n
\u201cFor most homeowners, their house is their biggest financial investment,\u201d said Steve Mennill, chief climate officer at the Canada Mortgage and Housing Corporation (CMHC) in a press release. \u201cAs this report clearly shows, an all-of-society effort to protect that investment from the growing threat of flooding would be of great benefit to many Canadians.\u201d<\/p>\n
The report highlights a number of options to limit the impact of flooding within a community, which includes creating flood risks maps for city planners and developers, protection guidances, flood risk scores, and standards to retain and restore natural infrastructure.<\/p>\n
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<\/a>Photo:\u00a0Genevieve<\/a> \/ Adobe Stock<\/em><\/p>\n