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What Australia’s fires could mean for insurance and real estate in Canada – Global News

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Australia’s devastating fires have already destroyed nearly 1,900 homes, but they’re just one of the many types of hazards facing homeowners.

Climate change is raising the frequency and severity of a number of natural disasters, from flooding and cyclones to soil subsidence, which causes structural damage when clay soils start to contract during prolonged periods of drought.

The increased risk has implications for insurance and beyond, according to climate risk analyst Karl Mallon. A recent report from his firm, Climate Risk, projects that 720,000 homes, or five per cent of Australia’s housing stock, will be uninsurable by 2100 as coverage becomes unavailable or prohibitively expensive.

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READ MORE:
Thousands more flee homes in Australia as heat, high winds fan flames

That kind of analysis has caught the attention of lenders. Two of Australia’s largest banks have recruited Mallon to help them assess how climate-related risks might affect their mortgage portfolios. One of them projected that increased insurance costs would increase its share of high-risk mortgages 10-fold in the span of around 40 years, from 0.01 per cent in 2018 to 0.1 per cent by 2060.

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Data on exposure to flood risk is already driving decisions about whether or not to issue mortgages in some cases, Mallon said.

“The banks are running the address through, and if they find that that address is in a flood zone, then they’re turning the mortgage down.”

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Over time, Mallon sees areas where getting a mortgage will become very difficult. The risk for those properties is that they’ll become hard to sell and eventually decline in value, he added.

The link between natural disasters, insurance and mortgages may be emerging in Canada as well. In both Australia and Canada, however, the issue seems to be limited to flooding for now.






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Australia bushfires: Why the situation is likely to get worse


Australia bushfires: Why the situation is likely to get worse

What about fires?

Whether Australia’s extraordinary fire season will have an impact on insurance premiums remains uncertain.

For one, it’s only spring Down Under, and Australians are holding their breath for what summer might bring.

Until now, though, “bushfires traditionally have been no cause for concern on the insurance front,” Mallon said.

That’s because even though Australia is prone to fires, they haven’t caused damage on a scale that insurers would consider “an unacceptable probability,” he added.

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It’s too soon to tell whether the current fires will change that.






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Bushfires cause red skies and black ash on New South Wales beach


Bushfires cause red skies and black ash on New South Wales beach

Fire and water are significantly different beasts in the world of home insurance, said Rob de Pruis of the Insurance Bureau of Canada.

Overland flood insurance, which covers damage from water flowing above ground and seeping into buildings through doors, windows and cracks, only became available in 2015. Its introduction was largely an industry response to the 2013 southern Alberta floods, which resulted in $6 billion in damages, of which just $1.7 billion was covered by insurance.

Damage from sewer backup is also a growing issue for insurers. They are facing both an increased likelihood of flooding caused by flash rain, which has been linked to climate change, and higher repair costs, partly because finished basements have become more common.


READ MORE:
First your home is flooded — then you lose your mortgage?

Home insurers are also struggling with a lack of up-to-date information about where flooding is likely to happen, although the government is working on updating Canada’s flood-risk maps, de Pruis said.

Severe flooding is also happening with increasing regularity, a problem for insurance, which is meant to cover events that are “infrequent and unforeseeable,” de Pruis said.


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How to protect your home from flooding

Fire, by contrast, is a familiar hazard to the home insurance industry, which traces its origins to the Great Fire of London in 1666, which nearly destroyed the city. Coverage for fire damage, including from wildfire, is standard in any home insurance policy.

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Extensive losses from fires, on the other hand, have remained relatively rare in both Canada and Australia so far.

In Australia, for example, it usually takes several years after a bushfire for vegetation to grow back to a point where there is fuel for another fire, Mallon said.

In Canada, even the Fort McMurray fire of 2016, the most expensive event for insurers in modern Canadian history, did not shake the industry.






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Lessons from Fort McMurray employed in High Level wildfire


Lessons from Fort McMurray employed in High Level wildfire

Canada’s domestic insurance companies had their own insurance to fall back on, something known as re-insurance, according to de Pruis. And the $3.7 billion in insured damages claimed by the Alberta blaze remain a relatively small price tag for the trillion-dollar giants of the global reinsurance market, which have seen natural disasters billed at tens of billions of dollars in other parts of the world, de Pruis said.

And for now, de Pruis added, there is just not enough information to predict the future of wildfires in Canada.

But experts warn climate change is helping make wildfires worse.

“The signals are there. Very strong signals that we’re going to see things get a lot worse before they get better,” Ed Struzik, a fellow at the Institute for Energy and Environmental Policy at Queen’s University, told the Canadian Press.

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Climate change driving up risk of wildfires in Canada, fire experts say

In Australia, “we’re seeing properties in places that have never burned essentially being razed to the ground,” Mallon said.

Even areas where recent bushfires destroyed the undergrowth are now burning again as extremely hot fires take out the canopy as well, he added.

In California, wildfires have become so frequent and costly that the state recently had to step in to prevent insurers from cancelling policies in high-risk areas.






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Timelapse video shows spread of wildfire in Santa Barbara, CA


Timelapse video shows spread of wildfire in Santa Barbara, CA

Canada is not immune.

“The warmer it is the longer the fire season,” University of Alberta wildland fire professor Mike Flannigan told the Canadian Press. “The warmer it is the more lightning you see.”

For every degree of warming, the number of lightning strikes goes up by about 12 per cent, he said. Lightning usually causes more than half of the wildfires in Canada.

“We’re going to see a lot more. Not every year, but on average we’re going to see a lot more fire, a lot more smoke,” Flannigan said.

“We have to learn to live with fire.”

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What homeowners can do

For those living near forested areas or bushland, learning to live with fire means making homes more resilient to it.

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For example, closing gaps in the exterior of a building — such as open eaves, wall cracks and holes around the edges of windows and doors — minimizes the chance that embers will accumulate around the house or penetrate inside. Multi-pane, tempered-glass windows and using fire-resistant materials for any outdoor decks and fences also help reduce the spread of wildfire.






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Canadians helping battle wildfires in Australia


Canadians helping battle wildfires in Australia

Although there are ways to build homes that will stand up to direct contact with flames, most residential properties in Australia tend to catch fire because of embers, which can fly kilometres away from where the fire actually is, said Ian Weir, a Brisbane-based architect who specializes in design for bushfire risk mitigation.

Sometimes, however, extreme heat can cause buildings to catch fire on their own.

“The houses themselves have ignited the surrounding bush around them. I’ve seen this firsthand.”

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Yet, until now, efforts to build fire-resistant homes and retrofit the existing housing stock have been limited in Australia, he said. The country’s building code has done little to spur innovation by encouraging industry to create new materials and techniques to keep homeowners safe from fire. Local governments have been encouraging homeowners to clear the ground around their properties instead of focusing on making buildings more fire-resistant, he said.

In Canada, homeowners can turn to FireSmart Canada, a national association that helps individuals and communities reduce wildfire risks with tools ranging from voluntary guidelines to property risk assessments.

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READ MORE:
Bigger, more frequent wildfires turning Canada’s boreal forest into source of carbon, researchers say

A report by Canada’s Institute for Catastrophic Loss Reduction found that more than 80 per cent of all homes that survived the Fort McMurray fire were rated “low” or “moderate” hazard level according to the FireSmart guidelines.

The municipal government for the Fort McMurray region is implementing a number of FireSmart initiatives to help mitigate the risk of future wildfires, according to its website.

However, adoption of FireSmart guidelines is generally voluntary, said Jason Thistlethwaite of the School of Environment, Enterprise and Development at the University of Waterloo.

“The one thing we know through a lot of research is that information alone is insufficient to change someone’s behaviour,” Thistlethwaite said.

“You need either significant incentives or rules.”

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That’s where Mallon sees a potential silver lining in the natural disasters that are ravaging his country. Homeowners are becoming more inclined to invest in retrofits that reduce their property’s vulnerability, he said. That should make insurers and banks more comfortable with the risk associated with the home, he added.

That’s already happening in Australia’s cyclone belt, where insurers are offering coverage and discounts in high-risk areas to homeowners who take certain precautionary measures, Mallon said.

“We’re coming back full circle.”

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— With files from the Canadian Press

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More tall towers being proposed, approved and completed in Vancouver, Burnaby, Surrey and Coquitlam

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There are 20 development projects with towers over 45 storeys that are selling condo units, under construction or near completion.

Developers are seeking approval for two 50-storey towers in the same block where Surrey city council recently gave the greenlight for what will be its tallest building at 67 storeys.

And there are several proposals for more tall towers like this in Surrey that haven’t been made public yet.

“There are ones of similar heights that are moving forward,” said Chris Dikeakos of Vancouver-based Chris Dikeakos Architects Inc. “And it’s not just in Surrey. Burnaby is another municipality. Coquitlam is starting to get applications for some much taller towers.”

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He added that with increased land and construction costs, developers are motivated to use all the density they can get and build taller towers. However, there is also a point where it stops making sense to push higher “because things like the cost of structural systems increase as you go higher.”

Across Metro Vancouver, there are more than 20 towers over 45 storeys that have been approved by municipal governments, according to data from Zonda Urban market analyst Justin Lee. More than half of these are in Burnaby. Five are in Coquitlam and Port Moody, while Downtown Vancouver, New Westminster and Surrey have one each.

Some are under construction, like the first phase of Onni Development’s Gilmore Place in Burnaby with its 64-storey towers. Others are closer to completion like Westbank’s The Butterfly at 57 storeys in the West End.

After these, there are 40 more tall-tower projects that have been publicly presented to city councils and are in some stage of seeking approval. Most are in Burnaby and Surrey, followed by Downtown Vancouver and Coquitlam.

“We’ll see if economic conditions allow for them to be built,” said Dikeakos, whose firm is working on the new tall tower approved in Surrey and other projects.

In late 2019, Pinnacle International Development made a proposal for a site near the Lougheed SkyTrain Station. It had three towers including one that would be 80 storeys and 250 metres tall. They would be the tallest buildings in Western Canada. Some more details were presented to Burnaby city council in May 2022 for towers of 80, 76 and 73 storeys, but the project has not progressed further with the city.

Bosa Properties initially proposed a project with two 70-storey towers on Kingsway near the Metrotown SkyTrain Station, but there haven’t been any further details since it was initially presented to Burnaby council in 2021. In December 2022, Bosa sold the site to Keltic Canada Development for more than $100 million.

Metro King by Anthem Properties is a proposal for a 66-storey tower between Kingsway and Hazel streets across from Metrotown that is nearing a final decision by the City of Burnaby.

This pipeline of potential projects is happening as cities have focused on adding density to sites near transit stations and town centres, according to Dikeakos.

“The taller buildings in these types of developments that you are going to be seeing tend to be real, mixed-use ones, meaning they have a commercial base with significant office or hotel use where the first 15 to 20 storeys are commercial even before you get to the residential portion,” he said.

His firm in recent years completed Station Square at Metrotown, which has five towers with the tallest being 54 storeys.

“One of the interesting changes that we’re seeing is that because these developments are being done near transit sites, cities are requiring less parking,” said Dikeakos. “If we had to do the same amount of parking required a few years ago, the depth of these excavations would make them completely unfeasible. (When) we’re not required to do as much parking, it allows us to do these taller towers and still make some financial sense.”

Even though developers are motivated to deal with increasing land and construction costs by building higher, there is a turning point. It will obviously be different for each project, but Dikeakos said that for the Station Square project, it was somewhere at the 52- to 55-storey height.

“That was the maximum we wanted to go in that particular case because things like the cost of structural systems increase as you go higher. The number of elevators potentially increases. Window-washing systems become more complex. There are all sorts of things that actually do add to the overall cost of these taller buildings.”

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Historic Muskoka Resort Hits the Market for $12M

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An iconic Muskoka resort has just hit cottage country’s real estate market.

For those looking for a new business venture in the summertime hot spot, Windermere House has just been listed for $12M.

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Windermere House

The sprawling, long-time landmark sits on Lake Rosseau — one of the “Big Three” Muskoka lakes — and is known for its quintessential Old Muskoka charm mixed with modern luxury and amenities. Beloved by both tourists and local cottagers, the picturesque resort has been synonymous with Muskoka tourism since 1870.

Muskoka ResortMuskoka Resort
Windermere House

Known as ‘The Lady of The Lake,’ this 56-room resort hotel sits in a prime location in the Village of Windermere, overlooking the stunning lake. Offering a dose of timeless charm, its historic features include original stone architecture, a charming veranda, and classic Muskoka-style windows. The hotel features several food and beverage outlets, full-service spa capabilities, and a 3,200 sq. ft. of function space that ranges from a private boardroom to state-of-the-art conference facilities.

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Windermere House

With quintessential cottage country recreation front and centre, the 6.62-acre resort features a heated outdoor swimming pool, tennis court, sand beach, marina, and golf course.

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Windermere House

The new owner of the property will have the opportunity to take up residence in Windermere Cottage, the traditional four-bedroom private cottage with a separate entrance from Fife Avenue that can also be rented as an additional resort property. Or, as the listing highlights, there’s also the option to personalize a penthouse “cottage” suite within the hotel.

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Windermere House

The Muskoka chair-filled property includes three detached staff houses, an older, staggered row-style 10-plex, and ample on-site parking.

While its price tag isn’t within reach of everyone, considering that most of the sprawling cottages on the lake sell for upwards of $5M — coupled with its inevitable income-generating potential — the property may be considered a steal for someone in the market for a breezy new business venture.

Find the full listing here.

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Erin Nicole Davis

Erin Nicole Davis is a born and raised Toronto writer with a passion for the city and its urban affairs and culture.

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Toronto building home to historic pub to be converted into new hotel

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Toronto is getting a new hotel by expanding an old hotel that has spent decades not being a hotel. I know, very confusing, but I can totally explain.

A four-storey building that has stood at the southwest corner of Church Street and Richmond Street East for over 140 years could soon undergo a significant transformation.

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The building at 124 Church Street was originally constructed as a hotel in the 1880s, and after 14 decades, a developer has filed plans to bring the property back to its roots with a renovation and expansion supporting a new boutique hotel.

M&G Hotels Limited has big plans for the property, filing a minor variance application that calls for a YY Architecture Studio-designed addition extending the building’s roofline and providing additional space for hotel and other hospitality uses.

This address has been home to McVeigh’s Irish Pub since 1962, and despite major changes on the horizon for the property, it looks like the bar will maintain its presence in the building, and be left practically undisturbed through the renovations.

Plans for the site show little modifications in store for the first two levels of the existing building, aside from a new elevator shaft and other small changes.

The current space occupied by McVeigh’s is listed simply as “existing bar” and “existing kitchen” in plans, a good indication that the establishment will maintain its long-term presence at the intersection.

New floors would be added above the current parapet, bringing the existing four-storey building to an increased height of six levels.

A total of 24 hotel suites are planned on levels three through six, topped by a new rooftop bar and terrace.

The rejuvenated hospitality property will reportedly operate under the branding Clover Hotel, and this will not be the first time that the site or even the current building has been home to a hotel.

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Diagram of the proposal showing additional floors and rooftop bar space. Image via City of Toronto development application.

The southwest corner of Church and Richmond has been home to bars and hotels since the mid-19th century, and the current 1882-built structure was originally constructed as a hotel, replacing an earlier timber hotel building dating back to the 1850s.

Opened as the Windsor Hotel and later renamed the New Windsor Hotel in the early 20th century, the building was maintained as a hotel into the 1960s.

Plans to expand the building and open a hotel are just some of the big changes happening to the property.

The existing building at 124 Church Street stands as the lone holdout against a huge condo development now under construction that will soon tower over the property’s south and west elevations.

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