Abstract for: The Impacts of Climate Change on the Dynamics of Housing Market
In this paper we developed a simulation of the impact of climate change in residential property markets. In developed countries, major portions of the residential property market are well formalized with established investment mechanisms. Equilibrium prices are determined through the interaction of demand and supply. However, disruptions such as the increasing risk of bushfires in California and Australia are changing the market behavior. In this paper, we simulate the impacts of these disruptions on the housing price dynamics, and consequently, the change in the number of owner-occupied versus rental units in residential areas. We captured the effects of climate change on housing demand by increasing home insurance costs as well as increasing the public awareness of bushfire risk.