Home prices drop by about 8.2 per cent in flood-affected communities in the months following the disasters, according to a new study.

It also notes a significant drop in homes listed for sale in those towns.

A study from the Intact Centre on Climate Adaptation (ICCA), affiliated with the University of Waterloo, looked at the impact of flooding on the housing market.

"This is the first time real data has been used to illustrate the impacts of flooding on the housing market. These are not scenarios, these are real results," said Joanna Eyquem, ICCA's director of climate change adaptation programs.

By studying six cities that have experienced major flooding in recent years, the researchers concluded that flooding lowers the average sale price of homes, increases the average number of days on the market before sale and reduces the average number of homes on the market.

To determine which effects were solely attributable to flooding, the researchers compared the housing market in flooded communities with nearby control communities.

For example, after the spring 2017 floods, the average price of homes sold decreased by 24 per cent in Gatineau. In the control community, house prices had decreased by seven per cent.

The researchers, therefore, conclude that the flooding caused home prices to fall by 17 per cent in Gatineau in 2017.

The average loss of value in the six cities studied was 8.2 per cent, a figure that is only a taste of what's to come for homeowners in Canada, Eyquem said.

"In Europe, some banks are working with scenarios of up to 45 per cent reduction in value in areas at high risk of flooding," she said, adding that climate change will continue to affect the housing market.

The ICCA study also shows a 44.3 per cent reduction in the number of homes listed for sale within six months of a major flood in a community.

GET THE FACTS BEFORE YOU BUY

The Intact Centre suggests that prospective homebuyers consult flood zone maps before purchasing a property.

Some municipal governments make these maps available to citizens, "but you have to know how to find them," which can be tricky, said Eyquem.

Not only can flood zone maps be hard to find, but they are often out of date.

A recent report commissioned by Public Safety Canada from the Council of Canadian Academies indicates that Canadian governments often make decisions based on outdated flood maps.

"Yes, this is a big problem in Canada, we're really behind the curve," said Eyquem.

A U.S.-STYLE RISK RATING SYSTEM NEEDED

Researchers at the Intact Centre suggest that federal, provincial, territorial and municipal governments develop a flood risk rating system for all properties similar to the Flood Factor system that exists in the United States.

On the Flood Factor website, it is possible to obtain a free flood risk rating, ranging from one to 10, for approximately 142 million U.S. addresses.

"A similar system in Canada would motivate homeowners with unfavourable ratings to protect their homes from flooding," the study's authors write, adding that the rating could be "added to real estate listings."

PROTECTING NATURAL ENVIRONMENTS

One way to limit flooding and its economic consequences is to "develop and implement guidelines and standards for the conservation and restoration of natural infrastructure," the report says.

Forests, grasslands and wetlands are important barriers to flooding.

The ICCA points out that a joint study by the Intact Centre and the Insurance Bureau of Canada shows that wetland conservation can reduce flood damage costs by 40 per cent.

This report by The Canadian Press was first published in French on Feb. 14, 2022.