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

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.

Automated summary

In Australia, after experiencing a wildfire event, properties near the boundary of the Bushfire Prone Area (BPA) have lower prices, while properties within the BPA with better environmental amenities are more resilient to wildfire risk.