Environment and real estate market

According to the report of the World Economic Forum, "Environmental Sustainability Principles for the Real Estate Industry" the real estate industry is liable for about 40% of global energy consumption, originates 20% of global greenhouse gas emission, and uses 40% of the raw materials.

On the international conference that took place in 2015 in Paris and was about climate change, 195 countries agreed and set the objective to restrict the increase of the average annual temperature of our planet at 2°C. The World Bank assumes that the real estate industry must reduce gas emissions by 36% until 2030 to support this plan.

We must realize that climate change is a huge problem that has straight effects on our lives and will burden the next generations pretty much. Vital goods will be at stakes such as food, drinking water, and even species extinction.

The United Nations Intergovernmental Panel on Climate Change (IPCC) estimates that an average increase by 1,5 ° C on the average temperature of our planet can lead to extinction about 20%-30% of the planet’s species and extreme weather conditions, something that will cause problems on our daily life and our economy.

In the last decades, a new type of property emerges on the real estate market and gains interest as time goes by. We are talking about “green buildings” that can conduce to the achievement of the goals mentioned above, ensuring the rational use and saving of energy on the building sector.

More and more properties are constructed in a way to be environmentally friendly and already existing properties are upgraded to be meet today’s requirements. It is clear, that investing in properties that are far away from this approach, will appear to be yield loss in the long term and this is because of the low value of these properties in relation to the others.

In the last decade investors are moving to “green buildings” as it is a type of real estate that gains more and more supporters.

Sustainability is not only about focusing on the direct effects on the environment. It examines the impact it will have on a global scale from the initiation of the construction, the integration of the building, and throughout its lifetime. More specifically, sustainability focuses on the use of renewable local building materials to create comfortable and healthy working and living environments.

Today investment in a real estate that is environmentally friendly, has a higher cost than to a conventional building. This is due to the high initial cost you have to invest in for the design and the construction of the building to build in all the contemporary technologies and requirements that a “green building” exacts. On the contrary, such investments have medium- and long-term benefits, as they have extremely low operational costs due to energy savings (electricity and other types of combustible materials) and water consumption. Also, it is important to highlight at this point that such investments take advantage of special tax treatments and are classified as low-risk investments. It is also certain that the demand for “green buildings” is going to rise in the future, especially on business premises, so these properties will yield high rents and stable cash inflows for their owners.

By investing in “green buildings” we invest in a better future for our lives and our planet!

 

The images used in the text above are from www.freepik.com & www.freepngimg.com


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