Climate change mitigation and adaptation measures must be integrated into a national housing strategy to improve neighbourhood liveability and housing affordability through to 2027
RE/MAX Canada releases chapter two on climate change, as part of its Unlocking the Future: 5-Year Housing Outlook, in partnership with Intact Centre on Climate Adaptation and Smart Prosperity Institute
RE/MAX Canada has launched the second chapter of the Unlocking the Future: 5 Year Outlook report, focusing on climate change as a factor impacting Canadian real estate in the next five years. This series of reports, done in collaboration with relevant area experts, is being issued throughout 2022, leveraging specific “what if” scenarios related to economic policy decisions, climate change and the future of work.
The impact of climate change on current and future homeowners is already being felt through displacement due to catastrophic events, higher insurance premiums and compromised liveability. The estimated trend of the overall costs of catastrophic losses has increased from approximately $1 billion in 2005 to almost $2.5 billion in 2021 and continues to be on an upward trajectory. With that, RE/MAX Canada collaborated with Kathryn Bakos, Director of Climate Finance and Science at the Intact Centre on Climate Adaptation and Dr. Mike Moffatt, Senior Director of Policy and Innovation at Smart Prosperity Institute, to examines climate scenarios such as floods, wildfires and severe storm events and their impact on the housing market. Chapter two concludes that both climate mitigation and adaptation measures are integral to improving housing affordability, as well as liveability, 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 Christopher Alexander, President at RE/MAX Canada. “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. In the meantime, giving guidance to 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 is important to share throughout the home-buying journey.”
“The reality is many homebuyers and sellers do not have a fulsome understanding or awareness of a property’s climatic risk,” says Elton Ash, Executive Vice President, RE/MAX Canada. “Transparency in the home-buying and -selling process, including disclosure of how key climatic factors influence a home and community, is an important step toward protecting Canadians in their home-buying journeys, now and in the future.”
The various chapters of this report are intended as a resource to help Canadians take a longer-term view of their investments, by taking into consideration possible hypothetical outcomes based on historical learnings, and current and near-future market conditions. The intention of this report is to encourage Canadians to step into this ‘idea sandbox,’ keeping in mind that RE/MAX and its collaborators are not trying to predict the future, rather, just model different versions of it for the collective benefit of Canadians.
- Climate change mitigation and adaptation measures must both be integrated into national housing strategies.
- The immediate need to fund and invest in the restoration and modernization of Canada’s green infrastructure, such as wetlands, grasslands and brown infrastructure, including sewage systems, among other initiatives, must become a priority for all levels of government.
- To protect real estate from the disruption of climate change, new levels of transparency in buying and selling homes should be considered by key stakeholders specifically as it relates to the property’s climatic risk.
Canadian Climate Change Survey
- 61 per cent of Canadians believe real estate is the best long-term investment they can make. Canadians do not see this changing over the next five years. However, when looking ahead to their future in 2027, 57 per cent of Canadians say that a key factor that will impact their housing location is climate change and the potential of weather-related events.
- 25 per cent of Canadians worry that climate change will impact their home/neighbourhood and their home-buying journey over the next five years.
- 49 per cent of Canadians are worried about the impact that forest fires, flooding and other weather-related events will have on their neighbourhood and community over the next five years.
About the 2022 Unlocking the Future Report
The 2022 RE/MAX Unlocking the Future Report includes insights from RE/MAX Canada partners Intact Centre on Climate Adaptation and Innovation at Smart Prosperity Institute and is purely hypothetical. Insights were supplemented with research from a Leger consumer survey (details below).
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,633 Canadians was completed between March 4-6 using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.43 per cent, 19 times out of 20.