Climate Change Is Creating Property Investment Opportunities In These

Climate change is leading to climate migration.

And climate migration is creating an opportunity for global property investors.

It used to be that northern California’s long and depressing rainy season started in October and continued until April with little sun in between. Summers were hot but pleasant.

Today, winter days in Sacramento are often bright with plenty of sunshine. This has led to unprecedented drought and water rationing in some areas. Summers are marked by wildfires that burn well into what used to be the rainy season.

As a result, California’s population is declining as people choose to leave the state. Property demand is falling in California… and increasing in places like Crossville, Tennessee, one town favorited by fleeing Californians.

The same kinds of climate migrations are beginning to play out worldwide. As an investor, you could do well to target the places people are seeking and perhaps avoid the places they’re coming from.

Assessing Climate Impact On A Property Market Overseas

To identify a market opportunity being created by climate migration, look both at the likely impact of predicted climate changes (this is a market’s “Vulnerability”) and at how well prepared the market is to handle and adapt to those changes (“Coping Capacity”).

In the “Vulnerability” category, consider these factors:

• Extreme weather risk (such as hurricanes, tornados, or extreme heat)
• Wet weather risk (violent thunderstorms or rain beyond what the infrastructure can handle)
• Drought, especially in areas that used to sustain agriculture
• Sea level rise and related coastal flooding

In particular, evaluate the effects of these criteria on agriculture and tourism.

In the “Coping Capacity” category, here are items to consider:

• To the extent necessary, does the country have adequate wealth or borrowing power to undertake major fortifications to its infrastructure?
• If so, do they have the political will to spend what’s necessary?
• Do they have the natural resources to get the job done, or must they import?

For Coping Capacity, it’s mostly a matter of money. As a result, generally, wealthy countries are better choices than poor ones.

On the other hand, some poor countries (or parts of poor countries) will score well in the Vulnerability category and may not need much Coping Capacity.

Most rating agencies are assigning climate-preparedness scores based on a country’s climate initiatives—things like implementation of renewable energy sources, carbon emission goals, electric cars, and fossil fuel reduction. Ratings like this are of little use to the overseas property investor.

More important is whether a country has the financial and technological wherewithal to mitigate the climate impact that the country is likely to see. As an investor, you want to know if the country will be sought after as other countries become challenged.

Top Three Climate Impact…