Sea Level Rise Affects House Prices in Coastal Cities: Evidence from the Globe

Abstract

The rising sea level (SLR) is challenging the stability of the housing market in coastal areas, exacerbating disparities compared to non-costal regions. However, the extent to which SLR will impact house prices remains uncertain. Moreover, existing studies have predominantly examined the impact of SLR on the housing market within specific geographic regions, leaving unanswered questions about the applicability of these findings on a global scale. Therefore, in the context of global climate change, we investigate the impact of SLR on house prices in coastal cities using data from the 50 most economically developed coastal cities in the world during the period 2009-2018, and predict the future house price movements under the effects of SLR. The results show that for every 1% rise in sea level, house prices in coastal cities drop by 3.18%, and house prices in island countries are more affected by SLR. Further prediction results show that the projected house price declines in island countries are more severe than in non-island countries, and that this trend intensifies as greenhouse gas concentrations continue to rise in next few decades. In the context of global rising sea levels, our study quantifies potential economic costs of climate change and provides recommendations for effective SLR and climate change mitigation policies.

Keywords: Climate Change, Sea level rise, House price, Island country, Non-island country, Prediction