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Climate change risk and real estate prices—Micro evidence from coastal cities in China

Author

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  • Huang, Xiaowei
  • Cheng, Ge
  • Zhang, Man

Abstract

Sea level rise (SLR) has increased in magnitude and certainty, exposing coastal real estate assets to increasing climate risk. We develop a theoretical framework to explore the mechanism of transmission of SLR to real estate prices. We use manually collected data from micro-level second-hand housing transactions from HomeLink Real Estate Brokerage Co., Ltd. in seven cities in Guangzhou province, China, to empirically examine the impact of SLR on real estate prices. We find that SLR negatively affects real estate prices. This negative relationship differs depending on seasons, economic growth, and geographic location. The negative impact of SLR on real estate prices is primarily reflected by investors' attention to climate and sea levels. Our study contributes to the literature on the effect of SLR on real estate prices and provides insights into optimal climate change policies.

Suggested Citation

  • Huang, Xiaowei & Cheng, Ge & Zhang, Man, 2025. "Climate change risk and real estate prices—Micro evidence from coastal cities in China," Pacific-Basin Finance Journal, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:pacfin:v:90:y:2025:i:c:s0927538x24004104
    DOI: 10.1016/j.pacfin.2024.102658
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    More about this item

    Keywords

    Sea level rise; Real estate price; Investor attention;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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