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German residential real estate valuation under NGFS climate scenarios

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  • Ter Steege, Lucas
  • Vogel, Edgar

Abstract

We combine data on real estate online listings and climate scenarios from the Network for Greening the Financial System (NGFS) to estimate changes in real estate valuations due to changing expectations about future energy costs. Using a simple theory of the relation between prices and energy consumption, we find that the most ambitious climate scenarios potentially come with significant impacts on real estate prices and thus the collateral value of inefficient homes. In the aggregate, losses in housing values and thus collateral could lie in the range of 11 to 13% of the aggregate housing value.

Suggested Citation

  • Ter Steege, Lucas & Vogel, Edgar, 2021. "German residential real estate valuation under NGFS climate scenarios," Technical Papers 09/2021, Deutsche Bundesbank.
    • Handle: RePEc:zbw:bubtps:283334
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    File URL: https://www.econstor.eu/bitstream/10419/283334/1/technical-paper-2021-09.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lionel Sopgoui, 2024. "Modeling the impact of Climate transition on real estate prices," Papers 2408.02339, arXiv.org.
    2. Lionel Sopgoui, 2024. "Impact of Climate transition on Credit portfolio's loss with stochastic collateral," Papers 2408.13266, arXiv.org.

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    More about this item

    Keywords

    Residential Real Estate; climate transition risk; climate scenarios; CO2 taxation;
    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
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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