Natural disasters and housing prices: Fresh evidence from a global country sample
AffiliationUniversity of Derby
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AbstractGiven that the literature on the impact of natural disasters on house prices is highly limited, this paper combines data on natural disasters and house prices from 117 countries, spanning the period 2000-2018 and a panel regression method to estimate the effects of natural disasters on house prices. The findings document that natural disasters lead to lower house prices, with the results surviving a number of robustness tests. When examining the impacts of natural disasters by type, the findings highlight that geological disasters exert the strongest (negative) impact on house prices. The results also illustrate the negative impact of those disasters on house prices when the distinction between small and large disasters is also accounted. The findings provide important implications for policymakers and property investors. Lower house prices in countries experience natural disasters events could significantly signify lower consumption and investment (the wealth effect), with further negative spillovers to the real economy. Economic policymakers could implement low-tax policies or quantitative easing schemes to support these areas/countries. The findings exemplify the need of governments and policymakers to mitigate climate change effects on housing by adopting new, more environmentally friendly technologies and energy sources.
CitationApergis, N., (2020). 'Natural disasters and housing prices: Fresh evidence from a global country sample'. International Real Estate Review, 23(2), pp. 815-836.
PublisherAsian Real Estate Society
JournalInternational Real Estate Review
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