If you were to be dramatic, you might say that climate change has the potential to be disastrous for the low-lying coastal properties soon to fall into the ocean on account of rising sea levels. Or you say that properties soon to be roasted by skyrocketing temperatures in southern climes seem likely to lose a bit of their value. Such statements would all be a bit of tongue-in-cheek ironic catastrophizing, but the truth of the matter is that climate change is indeed changing the world around us. And it definitely has implications for the property market. 

So how exactly does – or will – climate change effect house prices and the property market in general? Well, it is hard to give an exact answer to anything on this particular topic. So much depends on where and when we are talking. CityHome Collective, a real estate brokerage from Salt Lake City, maintain that climate is a part of what we can call a property’s environment. This environment can be thought of as the sum total of all the facts that exist externally in relation to the property itself. So, of course, climate change will be a part of that.

Speculative Projections 

As mentioned, it is impossible to give a truly rigorous answer to questions like this. All answers depend upon so many factors that are in themselves pretty unclear. Nevertheless, we can certainly speculate on how climate change might affect the property market and use intuition and what we know about the market today to imagine how things might change. 

For example, we mentioned earlier – half in jest – that rising sea levels will deplete housing stock in all areas of the world where houses are situated close enough to the coast to be at risk of being submerged. But it is indeed estimated that around two hundred million people globally will be displaced by rising sea levels. Were all the houses that they live in to be lost as well, then this would deplete the housing market, thereby driving up costs. Good news for sellers then – but at such a cost! 

Vague predictions such as this, based upon what we currently know about the property market are all that we can really offer to answer the question of what climate change will do to house prices. But let’s go for it anyway. Here follows some climactic events that climate change is expected to cause, and what each could do to the housing market. 

Rising Temperatures 

Rising temperatures cause all sorts of other climactic events, which could be destructive and disastrous in their own way. But setting that aside, one effect of rising temperatures could be to increase the carrying costs of a home. This means that the utilities and upkeep of the home would become more expensive. For example, higher temperatures would mean more people using electricity for air con units and spending more on the upkeep of their now sunbaked garden. 

Extreme Weather

Climate change is known to cause higher instances of the extreme weather such as floods, hurricanes, and the wildfires. Again, destruction of property is here the key factor. In turn, this would drive up the prices of unaffected areas. 

Rising Sea Levels

One of the biggest implications for the property market where rising sea levels is concerned is that those houses in high-risk areas would see their home insurance prices skyrocket. 

While all the predictions really are nothing more than speculation, one thing we can be sure about is that the effect of climate change on the property market will be huge. And real estate will have to adapt to keep up.