It is a proven fact that people want to live with like-minded people. That is why we tend to lean towards a neighborhood where we feel similar-thought people are living. The latest factor to in-fluence people into buying houses is - their belief in climate change.
According to a study conducted by the University of Chicago and the University of British Co-lumbia, a buyer’s belief in climate change is having an impact on the prices of a particular neighbor.
A waterfront property in Montreal comes with a discount and prices of houses in flood-risk areas are comparatively cheaper because people there believe that climate change is a reality.
As per the study, homes in non-believer neighborhoods sold for 7% more than homes from be-liever neighborhoods.
Disputing the Facts
Lorenzo Garlappi, UBC Sauder School of Business’s finance professor and co-author of the study does not agree with this study. Reasons:
• The study was conducted in the US market and cannot be said to define Canadian inten-tions as Canadians aren’t that easily swayed by beliefs.
• The price differentiation is prominently visible only in owner-occupied units.
Garlappi also said that unless the climate change debate really picks up and changes people’s perception, this conclusion might not much weight in Canada.
On the other hand, if all the people are equally affected after acknowledging the impact of cli-mate change, then their study will hold no relevance.
Alternatively, if the Government decides to take concrete action against oft-occurring natural disasters, then the entire dynamics would change.