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The latest climate report released by the World Meteorological Organization recently stated that the El Ni ñ o phenomenon has formed and rapidly strengthened, with a probability of nearly 100% that it will continue until February next year. This may become one of the strongest El Ni ñ o events since 1950. Meanwhile, the key index for measuring sea surface temperature anomalies in the equatorial Middle East Pacific is expected to reach its peak around the end of the year, approximately 3.7 degrees Celsius higher than in previous years, far exceeding the record of 2.6 degrees Celsius from 2015 to 2016. August this year was the hottest August since observation, with the global average sea temperature reaching a new high for the same month.

 

From a regional perspective, this summer in Europe has been particularly difficult to endure. Britain, France, Spain, and other countries are directly trapped in the "steamer" by waves of heat, with about 120 million people struggling to survive in the scorching heat; The temperature in many parts of southern Europe has exceeded 45 degrees Celsius in one fell swoop. This has led to buying and installing air conditioning becoming a "hotter than the weather" topic throughout Europe in the past few months.

 

Interestingly, besides air conditioning, there has been another topic that has become popular recently due to climate issues - the real estate market.

 

According to French media reports, real estate agents in France have generally reported that recently, south facing layouts are no longer as popular as they used to be; The single facing residential properties that cannot enjoy the "through the hall" trend have seen a decline in viewing volume; As for the quote for the top floor, it can be called "Waterloo" and even jokingly referred to as "a deduction for the entire apartment". At the same time, buyers' requirements for details are becoming increasingly specific. What was the indoor temperature during the last heat wave? Will sleeping with the window open at night make noise? Apartments with built-in blinds and sunshades, as well as communities with higher levels of greenery, are generally popular; If it is a house that has already been installed with air conditioning, it will definitely be worth a big blow when it changes hands

 

Roast from Paris is particularly concentrated. According to local media statistics, about 75% of the roofs in this city are covered with light gray zinc sheets, and the temperature under the scorching sun can rise to 70 to 80 degrees Celsius. The heat will flow along the roof truss straight to the top floor, turning the once popular attic directly into an "oven". French public health institutions reviewed the heat wave that caused approximately 15000 deaths in 2003 and found that residents living on the top floor had a mortality risk more than four times that of ordinary residents.

 

Industry experts say that a small attic reflects the era gap in housing supply in Europe. In the early years, temperatures in Europe were relatively low, with generally cool summers and extremely cold winters. Therefore, most old houses were designed with thick walls and dense windows, leaving little space for summer retreat needs. In addition, many European countries have widely implemented the protection system for old urban areas, resulting in the installation of air conditioning in households often having to go through two major checkpoints: joint decision-making by the homeowners' committee and municipal approval. The process is complex and time-consuming, and the overall household air conditioning penetration rate in Europe has always been less than 20%.

 

A survey covering 1750 real estate platform users in Europe shows that since last year, 80% of respondents have had enough of the scorching heat at home; One third of the people admitted that if the heat wave continues to intensify, they may not rule out relocating to other places.

 

The most devastated place is southern Europe.

 

Sunshine has always been the golden signboard of the Southern European real estate market. Northwest European residents have migrated south to the Mediterranean coast to purchase vacation and retirement homes, achieving decades of real estate prosperity on the 'Sunshine Coast'. Nowadays, the group of people who used to "chase the sun" are beginning to concentrate and move to the cooler north. According to data from a Spanish real estate platform, in August of this year, house prices in Cantabria and Asturias, located relatively north, increased by 17.2% and 14.1% year-on-year, respectively; Data from France also shows that housing prices in northern coastal cities such as Caen, Le Havre, and Brest rose by about 9% in the first half of the year, while Bordeaux in the southwest fell by 2%. Brittany and Normandy in the northwest were dubbed as "climate shelters".

 

The differentiation of housing prices does not only occur between the north and south. According to a study based on transaction data by a French notary industry organization, single family homes with the lowest energy efficiency rating have a transaction price about 25% lower than medium rated homes of the same area, and even if they are only one level lower, they are about 9% cheaper. Regulations are also forcing market transformation. According to the French Climate and Resilience Law, the least energy-efficient housing units will no longer be available for rent from January 2025, and the subsequent two bans will take effect in 2028 and 2034, respectively. If you can't rent it out, the holding logic will loosen accordingly.

 

The changes in the real estate market have now been transmitted to the funding side. A survey from the European banking industry shows that energy-efficient housing is more likely to receive green loans with favorable interest rates, while the application difficulty for low-energy housing mortgage loans is relatively high. The response of the insurance market is more direct. Affected by frequent extreme weather events, risk factors such as floods and wildfires have entered the real estate credit model on a large scale. The UK Environment Agency estimated in July this year that nearly 320000 houses and shops in London are facing climate risks, and some houses are difficult to sell due to lack of insurance. Last year, the average premium for comprehensive residential insurance in France increased by 8.4%; Financial regulatory authorities estimate that natural disaster related insurance premiums in the southern region may more than double by 2050. Another study estimates that by the mid-21st century, there may be approximately 430000 unsold, unsecured, and unsecured "climate prisoner's houses" in England.

 

Nowadays, climate risk, as a typical case of economic externalities, is entering the balance sheets of European households from textbooks. The experience of the next few dozen summers is becoming an important consideration in home buying decisions; The impact of extreme weather has also been quietly calculated into today's housing prices through four channels: regulations, credit, insurance, and relocation. As heatwaves shift from occasional news to frequent hot searches, "climate content" is becoming a new benchmark for European real estate markets.

 

The predicament in Europe has sounded the alarm for the latecomers of rapid urbanization. Housing is a remote manifestation of climate change. Instead of cooling down an overheated house afterwards, it is better to 'teach the house to breathe' beforehand. Many experts suggest that we can learn from China's mandatory national standards for residential projects, which will be implemented from May 2025, and include winter insulation, summer insulation, and building ventilation as basic performance requirements for new housing construction, in order to simultaneously upgrade housing supply in the process of promoting urbanization.

 

The heat deep in the Pacific is still waiting to be released, and the house will accompany us for many years to come. When the heat wave reshapes Europeans' home buying philosophy, it is no longer just the climate account that needs to be calculated, but also the asset account and health account. (Source: Economic Daily, Author: Sun Changyue)

 

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