The real estate sector has a significant correspondence with climate change. Many countries are feeling the impact of climate change and in some areas, rising water levels, heat waves, droughts, and fire risk are putting a serious dent in real estate values. Nearly 65% of people in the U.S. own homes, and on average, those homes represent 40% of their assets as well as a major source of household debt. Climate experts predict that nearly 2% of U.S. homes worth $882 billion are at risk of being underwater by 2100, in low-lying coastal regions such as Hawaii and Florida, nearly 10% and 12% of homes could be inundated. Based on the survey, climate risk and real estate investment decision-making explore current methods for assessing and mitigating climate risk in real estate, while also outlining the dynamic measures by Heitman and many leading firms to stay at the forefront of mitigation strategies and accurately price risk into investment decisions.
In the US, homes exposed to rising sea levels sell for around 7% less than observably equivalent unexposed properties at a distance from the beach. In Europe, commercial, residential and office buildings are exposed to floods and high winds more often such as the winter storms of 2015-2016 in the UK, which resulted in around $1.18 billion of property-related economic damage.Altogether, this demands an immediate intervention from global-level governing authorities, who must now define potential solutions to manage the impact of real estate on climate change.