This creation is my original content in Toutiao, and it is only first published in Toutiao, and unauthorized and prohibited wanton reproduction.
Title: Real Estate Markets under Climate Change: Risks and Changes in Asset Values
Lead:
In recent years, investment property considerations have moved beyond past urban potential analyses, such as GDP, population and size. In this new era, a fundamental but often overlooked factor is becoming increasingly important: climate change.
Our usual coastal cities, once synonymous with prosperity, are changing their future with reports from scientific organizations such as the Intergovernmental Panel on Climate Change. This article will take you on an in-depth look at how climate change is quietly affecting the real estate market, from house prices and transaction volumes to maintenance costs, revealing trends and challenges around the world.
Part I: Asset Value Risk in Coastal Cities
The impact of climate change used to be more theoretical speculation for house prices, but now it is becoming a reality. The example of Florida, USA, shows this trend. Since 2018, home prices in coastal Florida have declined, much less than in the rest of the state. Perhaps the market is gradually pricing in climate risk, a trend that cannot be ignored.
Part II: The Impact of Sea Level Rise on Properties
Repeated temporary flooding events and rising tides caused by rising sea levels are directly affecting coastal properties. Through the case of Florida, we found that transactions in high SLR risk areas preceded price declines, which is related to sellers underestimating buyers' anxiety about risk. In addition, people's concerns about climate change around the world are rising year by year, which has an impact on house prices.
Part III: Increase in property maintenance costs
Natural disasters brought about by climate change not only affect housing prices, but also directly affect the cost of property maintenance for homeowners. From 2000 to 2019, actual spending on repairs to home damage caused by climate change in the United States climbed from $8 billion to $26 billion. And, these maintenance costs are often difficult to cover through insurance compensation, putting homeowners under tremendous financial pressure.
Part IV: China's Challenges and Prospects
China, one of the countries most affected by climate change in the world, is also facing huge economic losses. Cities such as Guangzhou and Shanghai are particularly at risk from rising sea levels, and the threat of future flooding could even lead to dramatic changes in the real estate market. However, China's property insurance system is relatively imperfect, which makes people buying homes under climate risks need to pay more attention to property protection.
Epilogue:
In the face of the threat posed by climate change, the real estate market is already on the cusp. Everything from asset value to transaction volume to maintenance costs is changing profoundly. As investors, we need to consider the risks and opportunities of buying a home more holistically, not only focusing on short-term benefits, but also focusing on the long-term future. Only when climate risks are fully recognized and assessed can we make more informed decisions to safeguard our assets.
Part 5: The Importance and Challenges of Insurance
In today's real estate market, the importance of property insurance has become increasingly prominent. However, as mentioned earlier in the article, property insurance is not yet perfect in responding to natural disasters caused by climate change. There have been many disasters caused by floods, fires and other disasters in the United States, causing huge economic losses, but the actual insurance compensation is far from enough.
In the mainland, the penetration rate of property insurance still needs to be improved, and many people's property is not fully protected.
Part VI: Future Considerations and Actions
In the face of increasingly severe climate change, people who invest in real estate must choose where to buy a home more carefully and fully understand the risks of the property they buy. When making investment decisions, consider not only the price and appreciation potential of the property, but also the climate risks of the region in which it is located.
Investors should also pay more attention to property insurance to ensure appropriate compensation in the event of a disaster. At the same time, the government and society should also increase publicity and education on climate change risks, and raise public awareness and vigilance.
Epilogue:
From the urban potential of the past to today's climate change, investment calculations in the real estate market are undergoing a major transformation. The risks posed by climate change cannot be underestimated, but it is the challenges that lie opportunities.
Globally, we all need to be more aware of and understand climate risks and make informed decisions for future investments. Only by fully recognizing and addressing the risks of climate change can the real estate market develop more healthily and sustainably.
This article is my original and first published in today's headlines, unauthorized reproduction and use on other platforms is strictly prohibited, any unauthorized removal will involve infringement, and the pirate will bear the corresponding copyright responsibility.