Climate change has led to climate change.
And climate change is creating opportunities for real estate investors around the world.
In the past, the long and depressing rainy season in northern California began in October and lasted until April with little sun. It was hot in the summer but comfortable.
Today, on winter days in Sacramento, the sun is often plentiful and bright. This has resulted in unprecedented drought and water distribution in some areas. Summer is characterized by wildfires that often burn in the rainy season.
As a result, California’s population is declining as people choose to leave the state. Real estate demand is declining in California … and increasing in places like Crossville, Tennessee, a town popular with people fleeing California.
The same kind of climate change is beginning to occur around the world. As an investor, you can target the places people are looking for and perhaps work well to avoid where they are coming.
Assessment of climate impacts on overseas real estate markets
To identify the market opportunities created by climate change, the potential impacts of climate change (which are the “vulnerabilities” of the market) and how ready the market is to adapt to those changes. Check both (“coping ability”). ).
Consider the following factors in the “Vulnerability” category:
- Extreme weather risks (hurricanes, tornadoes, extreme heat, etc.)
- Risk in rainy weather (severe thunderstorms or rain beyond what the infrastructure can handle)
- Drought, especially in areas used to maintain agriculture
- Sea level rise and associated coastal floods
In particular, assess the impact of these criteria on agriculture and tourism.
In the Coping Ability category, the items to consider are:
- To the extent necessary, does the country have sufficient wealth or borrowing input to undertake major fortresses of its infrastructure?
- If so, do they have the political will to use what they need?
- Do they have the natural resources to get the job done, or do they have to import?
When it comes to coping ability, it’s mainly a matter of money. As a result, rich countries are generally a better choice than poor countries.
On the other hand, some poor countries (or some of the poor countries) may get high scores in the vulnerability category and may not require much coping ability.
Most rating agencies assign climate readiness scores based on national climate initiatives, such as the implementation of renewable energy sources, carbon emission targets, electric vehicles, and fossil fuel reductions. Such ratings are of little use to foreign real estate investors.
More importantly, there is financial and technical margin to mitigate the climate impacts that a country may face. As an investor, you want to know if another country will be sought after as it becomes more challenging.
Top 3 Climate Impact Opportunities
# 1 Portugal
Portugal has been recognized as the number one retirement paradise in the world for many years, thanks to its excellent weather and affordable living costs. The real estate market has been in high demand over the last decade. Today, Portugal is notable as one of the best places in the world to thrive in climate change.
The negative impact of climate change on Portugal’s GDP will be minimized. It will be one of the least affected countries in the world. Importantly, the level of preparation for dealing with the effects of climate change is high.
One of Portugal’s major vulnerabilities is drought. Minimize that risk by purchasing along the northern coast of Lisbon, where rainfall is high.
One of the reasons Portugal ranks high is that it is significantly less dependent on East Asia, which is heavily affected by climate change, than most other European countries. Similarly, it is less dependent on the United States than elsewhere in Europe. The country is largely independent of imports and is relatively economically independent of the more diversified trading sector than Europe’s larger economy.
Overall, Portugal is agile and adaptable.
# 2 Eastern Canada
Canada is one of the most resilient places in the world to climate change, even under the worst of scenarios.
Canada is vulnerable to rising sea levels. Storm surges and flooding of rivers pose significant risks and result in substantial productive land losses. However, the country is moderately affected in all other risk categories. Canada’s agriculture and tourism industry can even benefit from slight increases in temperature.
And Canada is ready to deal with the effects of climate change.
Canada’s weather and immigration policies keep Canada away from the list of “best places in the world to retire abroad.” However, investors should not miss new opportunities here. Canada has the potential to be a major winner of climate change.
# 3 Northern Spain
At the top of Spain’s list of strengths is its ability to manage sea level rise and its health care system. On the other hand, its greatest natural threat is due to floods, and its tourism industry will be adversely affected by climate change.
Investors need to focus on the northern part of the state adjacent to the north coast. It offers suitable options for both urban and rural purchases.
This part of Spain stands out as a safe haven. There are no major natural disasters, sufficient water is supplied, and the risk of forest fire is low. The agricultural base is solid.