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While the Arctic is remote to most of us—distant, geographically—it still happens to have an enormous effect on the rest of the world, no matter the location. The real estate industry is largely exposed to such great environmental uncertainties that challenge the stability of properties not only in the Philippines but all over the world.
How will climate change affect real estate?
Real estate markets face considerable risks from rising sea levels and other impacts of climate change. Gateway markets, such as Manila City, are commercial hotspots usually situated on coastlines that are particularly vulnerable in this case. With the looming impacts of global warming creating a formidable shadow over the real estate industry and its central cities, there is a question of whether or not the market is prepared for the implications. If investors, owners, and developers don’t act to mitigate the risks that climate change poses to their portfolios, they could suffer significant losses; this further translates to homeowners or landowners losing real-time value in their properties and holdings.
What has the real estate industry been doing in the meantime?
Investors are turning into a new breed of high-tech start-ups that can measure the risk climate change poses to real estate—from an hour or even decades into the future. Jupiter, for example, is a Silicon Valley-based company that incorporates climate impact data on flood, fire, heat, drought, cold, wind, and hail events into risk modeling for real estate assets on a global scale.
Big real estate firms from Asia, Australia, the US, and Europe are also pouring significant resources into calculating climate risk and its likely effect on property portfolios. This includes everything, from increasingly extreme weather phenomenon to a rise in sea levels. This translates to the industry having committed resources to gain knowledge and improve awareness of climate risk with methods that are likely to become more sophisticated within the next years.
For its part, the real estate industry is putting its resources to good use. Developers are making sure that they don’t get handed the short end of the stick should anything happen, with the real estate industry ideally being built on more solid ground now.
Homeowners are also highly sensitive to sudden threats of personal harm, and will change their buying behavior in order to avoid these threats. Extreme wildfires, for example, can upend local real estate markets. It is due to this that developers are now starting to work on the resilience of their properties—to stay ahead of the game. Some are also rebuilding developments using resilient designs to help accelerate recovery and improve prevention techniques. Arguably, these changes accelerate redevelopment and make the real estate industry more secure all over the world.
On the flipside to these wildfires, the problem of a rising sea level causing possible floods is all the more important. With the Philippines’ position as an archipelago blessed with more than 7,000 islands, coastal properties are all the rage. As a result, the real estate sector is seen to be shifting to higher ground, so as to avoid flood-prone areas. This does not decrease the value of coastal properties, however, with the presence of more comprehensive flood insurance that fuels the markets in those low-lying areas.
Is it too late?
The potential cost of not acting in the real estate sector has provided enough of a catalyst for the transition to more energy-efficient, calamity-proof buildings. Developers have already been aware of this for years, and have slowly taken steps in staying ahead of the possible risks brought about by climate change. Indeed, real estate markets across the globe are starting to introduce powerful new climate-related policies in the coming years.
The industry is adapting existing buildings and constructing new developments that are not reliant on fossil fuels, allowing the Philippine real estate industry some respite that will eventually lead to sustainability in the future. So, to close and answer the age-old adage, it is not too late for us—nor for the real estate sector—as long as we remain vigilant and respond proactively to climate change.
The Lamudi Real Estate Conference 2019
More than pushing for work-life balance as a real estate trend, developers are also incorporating resilient design elements into their projects to fortify them against calamities and the impacts of climate change. This is one of the highlights of The Outlook Conference 2019, to be held at the Makati Shangri-La on October 17, 2019.
Join Lamudi as we gather real estate firms in discussing the future of real estate with a focus on the following topics:
- Taking Sustainable Action: Addressing Climate Change Through Real Estate
- New-Age Customer Experience: Transforming Real Estate Marketing in the Age of Disruption
- Fresh Perspectives: Mapping Evolving Real Estate Sales
- Paradigm Shifts: Exploring the Sharing Economy in Philippine Real Estate
- Changing Face: Uncovering Alternative Ways to Invest in Real Estate
Interested participants can book their tickets for the event by sending an email to theoutlook@lamudi.com.ph.
For more information, visit lamudi.com.ph/outlook2019-conference.
The Outlook Awards 2019: The Philippine Buyers’ Choice Property Awards
Property developers are now building smart, innovative, resilient and sustainable buildings as a response to the changing trends in real estate and the effects of climate change. The annual Lamudi Awards 2019, now in its third year, recognizes the real estate developers that uphold global standards in their developments in a night of celebration at the Makati Shangri-La on November 14, 2019.
View the shortlist of nominees here.
For more information on The Outlook Awards, visit lamudi.com.ph/outlook2019.
