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For a long time, climate change was primarily addressed from the perspective of energy efficiency and emissions reduction. Today, however, it is also becoming an issue of adaptation for the real estate market. Summer thermal comfort, exposure to natural hazards, the quality of outdoor spaces, and future renovation costs are all emerging factors that increasingly influence the design, management, marketing, and ultimately the value of properties.

A bright top-floor apartment, a large south-facing glass façade, or a highly exposed terrace have long been considered almost exclusively as assets. While these features remain desirable, they are now being assessed with greater nuance.

How does the property perform during a heatwave? Can it be effectively ventilated at night? Does it have external solar shading? Are the surrounding areas green or entirely covered by impermeable surfaces? Is the basement exposed to surface runoff during heavy rainfall?

These questions are gradually becoming just as important as traditional criteria such as location, price, floor area, views, accessibility, and the quality of amenities.

This shift is not simply the result of growing environmental awareness. It reflects a very practical reality: buildings constructed or renovated today will still be in use decades from now, under climatic conditions that are likely to differ significantly from those for which much of the existing building stock was originally designed.


Climate is becoming a real estate risk in its own right

The OECD report on the resilience of real estate investments distinguishes between two major categories of climate-related risks.

Physical risks refer to the direct consequences of extreme weather events and gradual climate changes, including heatwaves, heavy rainfall, flooding, hailstorms, droughts, wildfires, landslides, and ground instability.

Transition risks, on the other hand, arise from the economy's shift toward a lower-carbon model. These include stricter regulations, evolving energy standards, new technologies, greater transparency requirements, changing financing conditions, and rising expectations from both occupants and investors.

These two dimensions are closely interconnected. A building may perform exceptionally well in terms of energy efficiency while remaining poorly adapted to high summer temperatures. Conversely, a property that offers excellent comfort during heatwaves may still rely heavily on a fossil-fuel heating system and require substantial investment to comply with future regulatory requirements.

Real estate is particularly exposed to these risks for three reasons: buildings cannot be relocated, they have a long lifespan, and their performance depends heavily on their local environment. The OECD therefore highlights that the same climate event can have very different consequences depending on a building's location, design, age, maintenance, and level of adaptation.

This territorial dimension is especially important in Switzerland. Climate-related risks vary considerably between a heavily paved urban plot, an Alpine municipality, a neighborhood located near a river, a hillside prone to landslides, and a city center affected by a pronounced urban heat island effect.


Switzerland Is Particularly Exposed to Climate Change

Switzerland is warming faster than the global average. According to the Federal Office for the Environment (FOEN), the country's average temperature has already risen by approximately 2.8°C compared with the pre-industrial era. The Alpine region has warmed at nearly twice the global average rate.

This trend is reflected in more frequent heatwaves, longer periods of drought, and an increase in heavy rainfall events. In mountainous regions, additional impacts include glacier retreat and the thawing of permafrost, which can increase the risk of rockfalls and landslides.

Switzerland was already highly exposed to natural hazards long before climate change became a major concern. Floods, surface runoff, debris flows, landslides, avalanches, rockfalls, and storms have always been part of the country's natural risk profile. Climate change does not necessarily create entirely new hazards; rather, it can increase their frequency, intensity, or geographical extent.

At the same time, urban densification, the expansion of impervious surfaces, and the growing value of buildings are increasing the potential for damage. Heavy rainfall does not have the same consequences on permeable land as it does in densely built-up areas, where water can no longer infiltrate the ground effectively.

The FOEN specifically notes that the risk of flooding caused by surface runoff is increasing as more land becomes impermeable. As a result, it is no longer sufficient to assess only a property's proximity to a lake or river. Properties located outside traditionally identified flood-prone areas may also be affected when rainwater accumulates or follows the natural topography of the land.


Summer Comfort Is Becoming a Key Quality Criterion

For many years, building performance in Switzerland was assessed primarily from a winter perspective: retaining heat, reducing heating demand, and improving insulation. These objectives remain essential. However, a high-performing building envelope must now also protect occupants from excessive summer heat.

The most vulnerable homes are not necessarily the least well insulated. Even a modern building with large glazed surfaces can experience significant overheating if its orientation, external shading, thermal mass, and ventilation strategy have not been properly designed.

Top-floor apartments and homes located directly beneath the roof are particularly affected. In some cases, the very features that have traditionally increased their value, such as unobstructed views, abundant sunlight, and large windows can become sources of discomfort during periods of extreme heat.

In both the sales and rental markets, this reality is giving rise to new questions during property viewings:

  • What is the orientation of the main living areas?
  • Are external shutters or sun-shading systems installed?
  • Can the bedrooms be effectively ventilated at night?
  • Do the windows allow for cross-ventilation?
  • Have the roof and façades been renovated?
  • Is there a cooling system?
  • Are the outdoor areas shaded?
  • What temperatures does the property reach during heatwaves?

For real estate professionals, summer thermal comfort is becoming an increasingly important indicator of a property's quality. Whenever appropriate solutions are in place, they deserve to be documented and highlighted just as clearly as the heating system, the quality of the insulation, or the level of operating costs.


Air Conditioning Cannot Be the Only Answer

As heatwaves become more frequent, installing a cooling system may seem like the most immediate solution. However, it is not always the most resilient or sustainable one.

The widespread use of air conditioning increases electricity consumption, intensifies peak energy demand during hot periods, and can release additional heat into the outdoor environment. It also creates greater dependence on technical systems that require maintenance, replacement, and a continuous energy supply.

The priority should therefore be to reduce cooling needs through passive or low-energy solutions, such as:

  • external solar shading;
  • automated shutters or sun louvers;
  • night-time ventilation;
  • properly insulated roofs;
  • sufficient thermal mass;
  • limiting solar heat gains;
  • landscaping and vegetation;
  • creating shaded outdoor areas;
  • using materials and surfaces that absorb less heat.

Technology still plays an important role, particularly through reversible heat pumps and smart building management systems. However, these solutions are most effective when they complement good building design rather than compensate for structural shortcomings.

For new developments, this forward-looking approach is especially important because design choices made today will determine a property's performance for decades to come. For existing buildings, renovation projects provide an opportunity to simultaneously address winter energy consumption, summer overheating, and the overall resilience of the building.


Vegetation and Water Are Reshaping Real Estate Projects

Climate adaptation does not stop at the building's walls. The quality of its surroundings plays a major role in occupants' comfort and in a neighborhood's ability to cope with extreme weather events. Trees, gardens, green roofs, and planted façades provide shade and cool the air through evapotranspiration. In contrast, dark mineral surfaces, large asphalted areas, and highly exposed façades absorb heat during the day and release it throughout the night.

Vegetation is therefore becoming genuine climate infrastructure. It improves thermal comfort, supports biodiversity, promotes rainwater infiltration, and can enhance the residential appeal of a development.

Water management is undergoing a similar transformation. The concept of the "sponge city" aims to retain, infiltrate, and reuse part of the rainfall on-site instead of directing it as quickly as possible into drainage systems.

This approach may include:

  • permeable pavements;
  • vegetated swales;
  • retention basins;
  • green roofs;
  • rain gardens;
  • rainwater harvesting systems.

These measures serve several purposes: reducing surface runoff, relieving drainage networks during heavy rainfall, cooling outdoor spaces, and conserving more water during periods of drought.

From this perspective, outdoor spaces are no longer merely aesthetic features. Their design can directly influence a property's resilience, operating costs, and overall quality of use.


Location Must Be Assessed Through a New Lens

Location remains the primary driver of real estate value. However, the definition of a "good location" is likely to increasingly incorporate a climate dimension.

Proximity to public transportation, schools, shops, and employment centers will remain essential. In the future, however, additional factors are likely to become more prominent in property assessments, including:

  • exposure to urban heat islands;
  • the presence of trees and green spaces;
  • vulnerability to surface runoff;
  • proximity to flood-prone areas;
  • exposure to landslides and ground movements;
  • the availability and security of water resources;
  • orientation and natural air circulation;
  • accessibility during extreme weather events.

The OECD emphasizes that climate risks are inherently local. Consequently, an assessment conducted only at the regional or municipal level may be insufficient. Climate exposure can vary from one plot to another, or even between neighboring buildings within the same district.

Knowledge of hazard maps, topography, surface runoff patterns, and historical damage records is therefore likely to play an increasingly important role in feasibility studies, property acquisitions, and real estate portfolio assessments.

This does not mean that an exposed property automatically loses value. The decisive factors are its actual vulnerability and the protective measures that have been implemented. A well-designed, properly maintained, and climate-adapted building may prove more resilient than a property that is theoretically less exposed but insufficiently prepared.


Climate Performance Could Have a Greater Influence on Property Value

It is still difficult to precisely isolate the impact of climate change on Swiss real estate prices. A property's value depends on a combination of factors, including the scarcity of supply, location, interest rates, the condition of the building, taxation, and demographic trends.

Nevertheless, a general trend is emerging: the market may gradually place greater value on properties that can maintain good living conditions over time while differentiating them from those that will require significant future investment.

A building that is prone to overheating, relies on a fossil-fuel heating system, is poorly insulated, or is vulnerable to surface runoff combines several risks:

  • reduced occupant comfort;
  • potentially higher operating costs;
  • future renovation work;
  • more difficult access to financing;
  • higher insurance premiums or deductibles;
  • more challenging marketing and resale;
  • the risk of technical or regulatory obsolescence.

Conversely, an energy-efficient, resilient, and well-documented building offers greater certainty regarding its future costs and usability. It can inspire greater confidence among buyers, tenants, investors, and financial institutions.

The OECD report already observes, in some markets, price discounts and lower liquidity for older or less resilient properties. It also highlights that sustainable buildings can benefit from lower operating costs, more stable rental demand, and better marketability. While these international findings cannot be directly applied to every region of Switzerland, they indicate the direction in which property valuation mechanisms may evolve.

The challenge is therefore likely to involve not only the emergence of a "green premium," but also a "brown discount" or climate discount affecting buildings that require substantial and insufficiently anticipated investments.


Decarbonization Alone Is No Longer Enough: Adaptation Is Also Essential

The building sector plays a central role in Switzerland's climate policy. The Climate and Innovation Act sets the objective of achieving net-zero greenhouse gas emissions by 2050. For the real estate sector, this ultimately means eliminating direct emissions, particularly those generated by fossil-fuel heating systems. The law entered into force on January 1, 2025, together with financial support measures aimed primarily at replacing fossil heating systems.

Replacing oil and gas heating systems, expanding the use of heat pumps and district heating, improving building envelopes, and increasing solar energy production therefore remain key priorities.

However, a decarbonized building is not automatically a climate-adapted building.

A heat pump will not protect a basement from flooding. Solar panels alone will not lower the temperature of a top-floor bedroom. Excellent winter insulation does not guarantee good summer comfort if windows are inadequately protected from solar heat gains.

The real estate sector must therefore pursue two transformations simultaneously:

  1. Mitigate climate change by reducing emissions associated with the construction, renovation, and operation of buildings.
  2. Adapt to its consequences by increasing resilience to heatwaves, heavy rainfall, droughts, and natural hazards.

These two objectives may sometimes be in tension. For example, a comprehensive energy renovation generates embodied carbon emissions, while a cooling system improves comfort but increases electricity consumption. The most appropriate approach is therefore to assess a building across its entire life cycle.


Renovating Existing Buildings Rather Than Systematically Rebuilding

The decarbonization of the building stock does not depend solely on reducing energy consumption during operation. Construction, renovation, and demolition also generate significant emissions associated with building materials, transportation, and construction activities.

From this perspective, extending the lifespan of existing buildings becomes a major lever for reducing emissions. Targeted renovation may be preferable to demolition and reconstruction when it preserves the existing structure, improves energy efficiency, and adapts the property to future climate conditions.

This circular economy approach encourages:

  • preserving existing structures;
  • reusing building components;
  • using recycled materials;
  • designing for reversibility;
  • ensuring the repairability of building systems;
  • reducing construction waste;
  • selecting low-carbon building materials.

However, each decision must be made on a case-by-case basis. Some buildings are well suited to gradual renovation, while others face significant architectural, technical, or economic constraints.

The ability to develop a coherent renovation strategy is therefore becoming an increasingly important aspect of property management. The objective is no longer simply to correct visible defects, but to determine the optimal sequence of interventions: building envelope, heating, ventilation, solar protection, energy production, water management, and outdoor landscaping.


Insurance and Financing Will Increasingly Take Climate Risk into Account

The impacts of climate change will not be borne solely by property owners and occupants. Insurers, banks, and investors are also directly concerned.

As climate-related risks become more frequent or more costly, they may result in higher insurance premiums, increased deductibles, additional preventive requirements, or limitations on insurance coverage.

Financial institutions may likewise incorporate a property's energy performance, exposure to natural hazards, and future renovation needs into their assessments. A building requiring substantial future investment may present a higher credit or resale risk than one that has already been adapted.

The OECD emphasizes that both physical and transition risks can affect cash flows, capital expenditures, operating costs, and asset liquidity. Climate risks therefore concern not only environmental sustainability but also the fundamental assumptions used to evaluate real estate investments.

For institutional property owners and portfolio managers, mapping the climate risks of their assets is gradually becoming as important as maintenance planning or long-term energy strategies.


The Role of Real Estate Professionals Is Evolving

For real estate agencies, property managers, developers, and valuation experts, climate change is expanding the range of information that should be collected, interpreted, and communicated.

When taking on a new property, it may become increasingly relevant to document:

  • the performance of the building envelope;
  • the heating system and its installation date;
  • solar shading systems;
  • ventilation possibilities;
  • observed indoor summer temperatures;
  • any previous water or hail damage;
  • applicable natural hazard maps;
  • climate adaptation measures already implemented;
  • opportunities for additional vegetation;
  • the property's solar potential;
  • foreseeable future investments.

This information can then be incorporated into property valuations, sales documentation, renovation strategies, and marketing materials.

This evolution nevertheless calls for caution. Climate performance should not become another vague marketing claim. It must be based on verifiable characteristics and described with precision.

Simply stating that a property is "sustainable" or "resilient" without supporting evidence provides little value. By contrast, specifying that it features external solar shading, cross-ventilation, a renovated roof, permeable outdoor surfaces, or a rainwater harvesting system provides meaningful and tangible information.

Real estate professionals will therefore increasingly play the role of translators, making technical, energy-related, and location-specific information understandable so that property owners, buyers, and tenants can make informed decisions.


Anticipating Change to Preserve Value and Usability

Climate change is unlikely to transform the Swiss real estate market overnight. Rather, it acts as a gradual force that is reshaping how buildings are used, influencing occupants' expectations, and altering the risks associated with property ownership.

Some effects are already visible: solar shading is becoming increasingly important, vegetation is being integrated into building design, fossil-fuel heating systems are gradually being replaced, and heavier rainfall requires more careful management of surface runoff.

Other consequences will emerge more gradually in property valuations, insurance conditions, financing practices, and location decisions.

For the real estate sector, the greatest challenge will be to avoid two extremes: underestimating climate risks because their impact on property prices remains difficult to quantify, or adopting an overly alarmist approach that assumes every exposed property is inevitably at risk.

The most appropriate response is careful analysis: understanding the characteristics of each location and each building, identifying vulnerabilities, estimating the investments required, and highlighting the measures that genuinely improve long-term resilience.

The Swiss real estate sector has already begun its energy transition. Its next step is to fully integrate climate adaptation into the design, renovation, valuation, and marketing of properties.

In a market where location has always been the primary driver of value, a building's ability to remain comfortable, accessible, insurable, and functional despite a changing climate may become one of the key determinants of its long-term value.


Sources

oecd.org - Article 

fri.ch - Article 

clubpatrimoine.com - Article

wuestpartner.com - Article 

immobilier.ch - Article 

neu-immo.ch - Article 

rsi.ch - Article 

we-net.ch - Article 

Real Estate Market Policy & Regulation