Climate risk enters the housing mainstream — and vanishes again
In the US, this shift became unmistakable when real estate giant Zillow revealed that more than 80% of prospective buyers now consider climate threats a "crucial" factor in their purchasing decisions. The company responded by launching a nationwide climate-risk score in partnership with environmental nonprofit First Street — an interactive tool rating more than one million homes for wildfire, flood, heat and air-quality danger.
But just over a year later, Zillow quietly removed the in-listing alerts after pressure from agents and homeowners who said the tool was scaring off buyers and hurting sales. Climate data is still available, but only through external links — a move that critics say reflects the industry's fear of confronting the scale of climate-driven risk.
Wildfires, soaring rents and an uneasy exodus
In early 2025, record-breaking wildfires tore through Los Angeles, destroying more than 10,000 homes, killing at least 28 people, and causing over $30 billion (€25.8bn) in losses. Scientists have since confirmed that the extreme weather conditions that fuelled the blazes were roughly 35% more likely due to climate change.
The destruction was followed by a wave of "rent gouging" allegations. Despite emergency laws capping price increases, hundreds of landlords reportedly hiked rents far beyond legal limits as displaced residents scrambled for housing.
California has now become the first US state to require sellers of pre-2010 homes to disclose wildfire risk and the mitigation steps taken — but critics say transparency cannot compensate for shrinking affordability, destabilised markets and rising flight from climate-threatened regions.
In Florida, hurricane-driven storms, rising seas and unaffordable insurance have triggered an exodus: 36% of residents say they have moved or are considering moving due to climate risks.
Heatwaves reshape Europe's housing market
Across Europe, climate-fuelled disasters are also rewriting the value of homes. A new study examining housing prices across Spain's 47 provincial capitals from 2009 to 2024 found that extreme heat is already depressing property values.
As Spain endured its hottest summer on record — including a 45.8°C heatwave and wildfires that scorched 380,000 hectares — researchers found:
With roughly 700,000 homes for sale nationwide, the findings translate to an annual loss of €117.6 million in sales value and €500,000 in rental income.
Yet the study also revealed an emerging paradox: in cooler northern regions of Spain, warming temperatures have increased property demand, raising sale prices by €2.80 per m² and rents by €0.012 per m².
Flood risk creates a property divide in the UK
In the UK, where 6.3 million homes now face river, coastal or surface-water flood risk, uncertainty is rippling through local markets.
Property consultant Rachel Ollington says climate factors have become "part of the conversation in ways we simply didn't see a decade ago."
She describes a new kind of buyer:
"People are checking insurance costs before they book a second viewing. Some arrive with climate risk reports, historic flood data — even erosion predictions."
Deals that once seemed secure are now collapsing at the last minute, she says, as insurers hike premiums or withdraw from high-risk postcodes altogether.
Landlords, too, are leaving the market in vulnerable regions, unwilling to shoulder rising maintenance and insurance burdens.
A global pattern: homes at risk, markets destabilising
Australia is experiencing a similar shock. The Climate Council estimates that flood-exposed properties across the country are collectively worth AUD $42.2 billion (€23.8bn) less than they would be without escalating climate risks.
The emerging ‘insurance crisis'
According to new research from Loughborough University, climate change is also accelerating a second, intertwined crisis: insurance withdrawal.
The UK's Association of British Insurers reported record home-damage payouts of £585 million (€610m) in 2024 alone. As disasters become more frequent, insurers face mounting claims — pushing them to:
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raise premiums sharply,
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restrict coverage, or
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exit entire regions.
Researchers warn that this dynamic could destabilise housing markets and the financial system:
"When insurance becomes unaffordable or unavailable, households are exposed, property values fall, mortgages become harder to obtain, and the risk of systemic failure grows."
A future with shrinking ‘safe zones'
From California to Spain, from the English coast to Australia's river basins, climate change is carving new lines between homes that remain habitable, insurable and financially secure — and those that do not.
For millions of residents, the question is no longer if climate change will affect their housing, but where there is left to go.