A view to die for? Housing value, wildfire risk, and environmental amenities

Kang Mo Koo; Jian Liang

doi:10.1016/j.jenvman.2022.115940

A view to die for? Housing value, wildfire risk, and environmental amenities

J Environ Manage. 2022 Nov 1:321:115940. doi: 10.1016/j.jenvman.2022.115940. Epub 2022 Aug 24.

Authors

Kang Mo Koo¹, Jian Liang²

Affiliations

¹ Global Finance Unit, Hana Bank, 66 Eulji-ro, Jung-gu, Seoul, 04538, South Korea. Electronic address: kmk2057@gmail.com.
² Department of Finance, Deakin Business School, Deakin University Melbourne Burwood Campus, Elgar Road, Burwood, VIC 3125, Australia. Electronic address: jerry.liang@deakin.edu.au.

PMID: 36027735
DOI: 10.1016/j.jenvman.2022.115940

Abstract

Utilizing a unique database of residential real estate transactions, we examine the price change near the boundary of the Bushfire Prone Area (BPA), a planning zone indicating high wildfire risk, after experiencing a salient wildfire event in Australia from 2015 to 2016. While the properties within the BPA are valued more by 1.6%-1.9% in general, home buyers pay less for the properties in the BPA by 0.9%-1.7% after experiencing a salient wildfire event compared with the properties located outside of the BPA. Moreover, the properties in the BPA with greater environmental amenities are more resilient to the impact of wildfire risk salience than the rest BPA, necessitating an analysis of the role of environmental amenities in the research on wildfire risk in the housing market context.

Keywords: Bushfire prone area; Environmental amenity; Housing market; Wildfire risk.

MeSH terms

Australia
Conservation of Natural Resources
Fires*
Housing
Wildfires*