Canada’s Wildfire Crisis: How Climate Disasters Are Reshaping Real Estate in 2025

As of early June 2025, Canada is experiencing one of its most severe wildfire seasons on record. Over 200 fires are actively burning across provinces including British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario, with more than half classified as "out of control" . These fires have consumed approximately 19,900 square kilometers of terrain, a significant portion of which has burned in the past week.

The smoke from these wildfires has not only affected air quality across Canada but has also drifted into the United States, prompting air quality alerts in several states. Notably, smoke has reached as far as Europe, indicating the vast scale of these fires.

Impact on Real Estate

1. Property Values and Insurance

Climate change-related risks, such as wildfires, are leading to decreased property values in affected areas. Potential buyers may be hesitant to invest in properties with a higher likelihood of damage. Additionally, insurers might increase premiums or deny coverage in high-risk zones, making it more challenging for homeowners to protect their properties adequately.

2. Construction Costs and Housing Supply

The wildfires have disrupted the North American lumber market, with prices rising significantly due to reduced supply from affected regions. This increase in construction costs can lead to fewer new homes being built, exacerbating housing shortages and driving up prices.

3. Shifts in Buyer Preferences

There is a growing trend among homebuyers to consider climate-related risks when purchasing properties. A survey indicated that 35% of homeowners considered the possible risks of weather patterns caused by climate change when buying a home, with younger buyers being more likely to factor in these concerns.

4. Regional Market Variations

The impact of wildfires on real estate varies by region. For instance, in ski-adjacent areas like Whistler, British Columbia, and parts of Quebec, there has been a noticeable decline in property demand and prices due to the increased frequency of wildfires. Conversely, some areas have shown resilience, with property values rebounding post-disaster, as seen in the Okanagan Valley following the 2003 wildfires.

Preparing for the Future

As wildfires become more frequent and intense, it's crucial for homeowners and potential buyers to consider fire-resistant building materials and air quality solutions. Implementing fire-resistant roofing, installing advanced smoke detectors, and using high-efficiency air purifiers can mitigate some risks associated with wildfires.

In conclusion, the current wildfire situation in Canada underscores the need for proactive measures in the real estate sector to address the challenges posed by climate change.