How Climate Change Affect the Perceived Risk of Living Space?
Ervi Liusman 1*, H.T. Lau 2, K.W. Chau 3

1 School of Hotel and Tourism Management, The Chinese University of Hong Kong
2 Department of Real Estate and Construction, The University of Hong Kong
3 Ronald Coase Centre for Property Rights Research, HKUrbanLabs, The University of Hong Kong

Abstract

Tropical cyclones, referred to as typhoons in the Northwest Pacific, are significant weather phenomena in Asia. Direct hits by typhoons in Hong Kong are relatively rare, occurring approximately once every three years. However, climate change has intensified tropical cyclones, increasing both their frequency and severity. The most severe typhoons are classified as super typhoons, which are rare, accounting for only about 10% of all typhoons. Despite this rarity, Hong Kong experienced two super typhoons in 2017 and 2018 (Super Typhoon Events), events likely linked to climate change.

This study investigates whether housing buyers perceive Super Typhoon Events as signals of climate change rather than isolated events and thus affect the perceived risk of their living spaces. Such risks, if any, should be reflected the selling price of the affected housing units. This study examines the long-term impacts of by Super Typhoon Events on prices of affected housing coastal areas. Our empirical findings reveal persistent decline in prices of affected housing units in coastal areas, while adjacent inland housing prices increased due to demand shifts. Notably, no such long-term effect was observed following a severe typhoon in 2012. These results confirm that climate change has increased the perceived risk of living spaces in coastal areas vulnerable to typhoons in Hong Kong. The findings contribute to the growing body of evidence on the serious and long-lasting consequences of climate change on living space, even in densely populated cities with robust anti-storm infrastructure.

Keywords: Living space, Climate change, Tropical cyclones, Coastal areas, Housing prices

Topic: Various Dimension of Livable Space