German residential real estate valuation under NGFS climate scenarios

Lucas Ter Steege and Edgar Vogel

No 09/2021, Technical Papers from Deutsche Bundesbank

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.

Keywords: Residential Real Estate; climate transition risk; climate scenarios; CO2 taxation (search for similar items in EconPapers)
JEL-codes: Q41 Q54 R31 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubtps:283334

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