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If you're considering buying or renting property in Spain, it's essential to be aware of how climate change is influencing the housing market. Recent studies have highlighted that rising temperatures are affecting property values, making it more important than ever to choose a location that offers both comfort and long-term value.

 

The study Hot Property: A Spatial Analysis of Temperature and Housing Prices in Spain analysed housing prices and temperature data across Spanish provinces over the past fifteen years. What researchers found is that each additional day above 35°C leads to a 0.08% decrease in sales prices and a 0.15% decrease in rents, while in cooler regions the increase accelerates twice as much.

 

Increasingly intense heat waves, more devastating forest fires, floods, droughts... Climate change is a clear reality, and the real estate market is sitting up and taking notice.

 

In a nutshell, the recently published research reveals that rising temperatures are slowing down house prices in the areas of Spain most exposed to heat, while cooler regions are gaining in appeal. And this is just one aspect of a much broader set of climate and environmental risks that are already being taken into account when valuing a home.

 

"Faced with many days of extreme temperatures, buyers are moving to more temperate provinces," one of the researchers pointed out, referring to the likes of Sevilla and other provinces in the south of Spain.

 

Along these same lines, a CaixaBank Research report published a few months ago confirms that home sales are increasing most strongly in what’s known as "fresh Spain ."

 

In 2024, Galicia (22.3%), La Rioja (20.0%), Castilla-La Mancha (19.4%), Asturias (18.6%), Cantabria (16.4%), Navarra (15.0%) and the Basque Country (13.8%) were the regions which grew in demand the most. In contrast, more attractive traditional areas such as the Canary Islands, Andalucia, Catalonia and the Valencian Community experienced more moderate home sales increases, and in the Balearic Islands property purchases even decreased.

 

"Provinces experiencing extreme heat may face long-term declines in home values, potentially reducing their attractiveness as investment destinations. Conversely, provinces with milder climates are likely to increasingly gain in value, attracting both households and capital," the study added.

 

But the researchers were at pains to stress that the climate and environmental risks affecting home values ​​are much broader. As climate change continues to influence weather patterns, factors such as energy efficiency, flood risk and overall environmental resilience are becoming increasingly important in property valuations. Homes that are poorly insulated or located in high-risk areas may face declining values, while properties that are energy-efficient and situated in safer towns could see their appeal grow.

 

We’re seeing the impact all across the country. According to data from Veltis Rating, homes with low energy efficiency can lose between 15% and 25% of their value if they don't adapt to climate regulations, and the fateful DANA of October 2024 has led to a 30% increase in home repair costs in the affected area.

 

Along the same lines, a 2021 study by the Bank of Spain indicates that the environmental deterioration of La Manga del Mar Menor has translated into losses of up to 40% in home value. And the list of examples goes on.

 

"Climate risks affect the value of a home, regardless," the study concluded.

 

 

Image: Freepik