Deciding to invest in global real estate involves one major consideration risk. As climate change reshapes the playing field, the increasing frequency and severity of extreme weather events, from floods and wildfires, necessitate a new approach to real estate planning with immediate action from investors to architects and building manufacturers.

Benefits of resilient real estate planning:

• A strategic financial move
• Safeguards investments from physical damage
• Enhances long-term value,
• Secures favorable financing
• Meets the rising demand for sustainable, secure properties

Building properties resilient to climate change

The World Green Building Council has identified an alarming amount of economic losses from climate change but also forecasted that by 2030 climate adaptation methods could generate net benefits of up to $7.1 trillion. These measures must include buildings with thoughtful design, such as elevated foundations, flood barriers, and water-resistant materials, to mitigate the risk of rising sea levels and storm surges. In wildfire-prone regions, fire-resistant materials for roofing and siding are becoming standard practice. Furthermore, buildings are being designed to better handle extreme temperatures through improved insulation, passive cooling strategies, and green roofs, which help to combat the urban heat island effect.

 Disaster-proofing real estate investments

For new and experienced investors, there is hope in the form of disaster-proofing an investment to help mitigate risk. This includes rigorous climate risk assessments and using data and modelling to predict a property’s vulnerability to future climate events. Financial models are now being adjusted to account for potential losses from natural disasters, and capital expenditure plans are being developed to fund necessary resilience upgrades. It is also recommended that investors diversify their portfolios geographically, avoiding a concentration of assets in high-risk zones.

Insurance trends for risk-prone areas

Navigating real estate insurance is never easy, but a consultant can help you find alternative solutions, such as parametric insurance, which provides a predetermined payout based on a specific trigger event rather than a lengthy damage assessment. Developers and investors are also finding that investing in climate-resilient features can lead to lower premiums. Proving that a property is designed to withstand a specific disaster can result in more favourable insurance rates, and buildings must be constructed according to code from the start. Whatever insurance trends you prefer, it will be necessary for a robust portfolio. According to Deloitte, US homeowners could suffer US$118 billion in losses by 2030 due to extreme climate events, and other countries worldwide could face a similar fate, making insurance an imperative.

SWIFT Group can help you with resilient real estate planning to future-proof your investment. Book a consultation.