Years of flooding across Canada pushing down housing prices: study

Flooding in Canada in the last decade is having a big impact on real estate, according to new research, and governments are being warned to do more to protect housing from rising waters.

A study out of the University of Waterloo has found flooding in Canada in the last decade cut an average of 8.2 per cent off the sale price of homes in several markets.

Researchers with the Intact Centre on Climate Adaptation studied several floods that occurred in five Canadian cities between 2009 and 2020.

The devastating floods in Abbotsford was not part of the study. However, Kathryn Bakos, a director at the university’s Intact Centre on Climate Adaptation, says the city may be a special case, considering the revved-up real estate market. It could be that buyers would pay a premium, even for a home at greater risk of flooding.

“In that housing market, there is so much demand, it doesn’t matter whether there was flooding or not. People still want to live there and therefore they will pay for that risk to be priced into the system.”

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Regardless, she says governments, insurers, banks, and home owners need to do more to adapt to climate change and mitigate the risk of floods. That includes updating flood risk maps and developing new tools.

“Develop a system that establishes a flood risk score for any residential property based on address or postal code,” Bakos said.

“The events that happened in Abbotsford, they will continue to happen. But we have measures in place to adapt against those impacts and protect against those impacts … we just urgently need to use them now.”

Data suggests houses selling last December for an average price of $713,500 would instead go for $654,993, once hit by a flood, reflecting a loss of $58,507, says the study that was partially funded in part by Canada Mortgage and Housing Corp.

Floods also reduced the number of homes available for sale by 44.3 per cent and increased the number of days they spent on the market by 19.8 per cent, according to the report.

The reduction in listings could be due to an expectation of a lower listing price in the aftermath of flooding, but may also reflect people waiting for the “stigma” of flooding to pass or the time required to remediate a house following flood damage prior to listing.

Meanwhile, separate research from Environment Canada concludes the likelihood devastating floods like the one in November will only increase as global warming continues to upend normal weather patterns.

Lead author Nathan Gillett says his team came to the conclusion by using climate models to compare B.C.’s weather with greenhouse gases and without.

Almost 15,000 people were forced from their homes at the peak of the floods in B.C.’s South Coast. Roads and bridges, including sections of the Coquihalla Highway, were washed away and farms were flooded in up to two metres of water.

Gillett says the study’s conclusions point to the need to rebuild roads and buildings that are able to withstand more severe weather than in the past.