This article is republished from The Conversation under a Creative Commons license.
Luarca, Asturias, photo by Miquel Fabre (CC BY-NC-ND 2.0) via Flickr.
In August 2025, Spain suffered its worst heatwave since records began. It reinforced the fact that climate change is no longer a distant threat—it is real and present, and is directly impacting our cities, our health… and property prices.
Our recent study offers an eye-opening look at how increasing temperatures are impacting Spain’s property markets, and transforming the value of housing.
Although the study centers on Spain, the country’s striking climate diversity positions it as a bellwether for internal climate migration. Its eastern, southern, and inland regions experience hot, predominantly dry conditions, while the northern coast enjoys a markedly cooler Atlantic climate. Unlike international migration, people relocating within Spain face few legal or bureaucratic barriers—provided, of course, they can afford to do so.
Cool Climate, Hot Property
Using data from Spain’s largest online property portal, Idealista, we analyzed sale and rental prices in mainland Spain’s 47 provincial capitals between 2009 and 2024. We found that extreme heat is affecting property values. Specifically, each additional day over 35°C translates into a drop of €1.40 per square meter in sale prices, and €0.0059 in monthly rental prices within the same province.
To put this in less abstract terms, the average-sized Spanish home is somewhere around 120 square meters. With around 700,000 homes for sale or rent within the country in 2024, this equates to an annual loss of approximately €117.6 million per year in sales, and €500,000 in rental prices.
Plaza de la Constitución in Oviedo, Asturias, Spain. Photo by Jorge Franganillo (CC BY 2.0) via Wikimedia Commons.
Who Benefits from the Heat?
According to our study, the country’s cooler regions stand to benefit from their neighbors’ high temperatures. Sale prices have risen in these areas by €2.80 per square meter, and rentals by €0.012, creating annual gains of around €235 million in sales and €1 million in rents.
In short, extreme heat is reducing value in some areas, and raising it in others. Spain’s cooler regions stand to benefit economically from heatwaves elsewhere as their sale and rental prices increase.
This displacement of value, which we can tie to patterns of internal climate migration, has profound implications for the future of city planning, property investment and regional planning. Is this a new form of climate gentrification? Will Spain’s coolest regions become its hottest property? Our study suggests that this is the case, and that the process is already well underway.
Homes, Climate Change and Local Economies
Property markets are sensitive to climate risk. In countries like the US and China, there have been well-documented falls in property prices in areas exposed to hurricanes, wildfires and floods. In Spain, extreme heat is exerting a silent yet persistent influence—while it is not destroying homes directly, it is eroding their appeal and value in the mid-term.
This finding puts paid to the idea that financial and property markets are somehow immune to climate change. On the contrary, these are the areas where climate change will filter through to the everyday economy, and start having very real impacts on ordinary people’s finances. And when a region’s house prices fall due to extreme heat, it is not just homeowners who lose out—it also impacts the region’s tax income, infrastructure investment and social cohesion.
Enseada de Orzán, A Coruña Spain photo by Pablo Herrero (CC BY 2.0) via Wikimedia Commons.
The displacement of demand toward cooler provinces is a reflection of climate migration. While we generally associate this concept with international movement, it can also happen within a country. In Spain, extreme heat may well push people out of southern and inland areas toward the north or higher altitudes, where quality of life is seen as more sustainable.
Our study underscores the fact that these movements are not just demographic but also economic. The flows of property capital follow the movements of people.
This means areas where the climate is seen as more hospitable can anticipate greater investment, but this could place pressure on prices. The risk is that, as these areas become more desirable, local populations will be shut out of the property market. This would, in turn, increase inequality in these areas.
Spain’s Property Future
The property market’s future will be resilient and sustainable, or it will not exist at all. The impact of extreme heat is already leaving its mark on property values, and this will only intensify over the coming years.
The real question is no longer whether climate change will affect the market, but how we can respond to this challenge. We are faced with a choice: proactive policy changes, or inaction that will deepen inequalities and cause massive economic losses.
Our study is a warning: climate change will transform Spain’s property market, affecting prices, investment and access to housing. Building climate risk into housing policy and financial strategy will be key to guaranteeing an equitable, sustainable and resilient society in the face of increasing heat and territorial inequality.
Just like its towns and cities, Spain’s property market is on the front line of the climate crisis. What we do today will determine the social, economic and human value of housing in the future.
Simón Sosvilla-Rivero, Catedrático de Análisis Económico, Universidad Complutense de Madrid
Adrian Fernandez-Perez, Assistant Professor in Finance, University College Dublin
Marta Gómez-Puig, Professor of Economics, Universitat de Barcelona
This article is republished from The Conversation under a Creative Commons license. Read the original article.
