Climate change is changing the German real estate market: heat, floods and energy efficiency as price factors

Frankfurt. Manfred Goldstein believed that he had made provisions for his retirement by purchasing a property near the Werre River. But now, according to the wishes of the city of Herford, the 3,000 square meter area that he acquired in 1997 is only to be designated as a green area due to the risk of flooding. This would make development impossible.

The case shows: heat waves, heavy rain and floods not only change the climate. They are also becoming a growing risk to the real estate market. This raises the question for investors and buyers as to how stable their property's value will be in the future. How much will this risk affect buying and selling pricing?

The Handelsblatt spoke to experts, evaluated several studies and used an exclusive analysis from the placement portal Immoscout24. These are the five most important findings.

According to the study by Wüest Partner, the risk increases particularly significantly due to heat. According to a recent analysis by the consulting firm, up to 68 percent of all buildings in Germany are likely to be exposed to high levels of heat stress by 2050.

The southern and central parts of Germany as well as densely built-up urban areas are particularly affected. However, as emissions rise, the risk is increasingly spreading northwards.

The risk of heavy rain also remains high. Owners should be particularly concerned in southern Germany and the low mountain ranges, while at the same time the danger is increasingly spreading to the north and west.

However, the region is less important than the specific micro-location and the vulnerability of the property, says Sven Bienert, who has headed the Competence Center for Sustainability in the Real Estate Industry at the International Real Estate Business School (Irebs) in Regensburg since 2010. Flood and heavy rain risks could differ significantly over short distances. In hot weather, heavily compacted and poorly shaded areas are particularly relevant.

“We analyzed the price development in all German districts nationwide between 2021 and 2026 under the aspect of heat,” says Sebastian Hein. He is Director of Market Data at Value AG, which has one of the largest real estate databases in Germany. "The result: Houses in locations that are particularly exposed to heat tend to perform worse than average in terms of value. The minus is an average of 1.4 percent - and is therefore already an initial signal."

The findings regarding flooding are similar, says Bienert. Studies have shown that real estate prices could experience price reductions following specific flood events and a resulting increased risk perception. However, a specific event is not even a prerequisite for this: According to Bienert, studies have shown discounts in purchase prices and rents simply for the location in designated flood risk areas. “For individual, highly exposed properties, the effects can be significant,” emphasizes Bienert.

The issue is now also reflected in financing. According to Irebs, initial European studies have shown that physical climate risks are incorporated into credit standards and financing conditions.

Especially when it comes to energy efficiency, the effects are now clearly reflected in prices and rents on the German real estate market. Postbank, together with the Hamburg Institute of International Economics (HWWI), recently examined how much energy efficiency influences the price. The institute combines the higher efficiency classes A+ to D as a group with “very good to average energy efficiency”. The researchers consider classes E to H to be “below average to poor energy efficiency”.

This applies to the seven largest German metropolises, i.e. Hamburg, Berlin, Cologne, Düsseldorf, Frankfurt, Stuttgart and Munich: The average price for apartments with very good to average energy efficiency is 1,337 euros per square meter, higher than the price for apartments in efficiency classes E to H. The gap is particularly large in Hamburg: there the difference is around 1,893 euros per square meter.

Energy efficiency can also have a significant impact on prices outside of large cities. In 83 of the districts and independent cities examined, the average price premium for apartments in energy efficiency classes D and better is at least 1,000 euros per square meter. In the Bavarian district of Miesbach, where Lake Tegernsee is located, prospective buyers even have to expect a record surcharge of 3,133 euros per square meter if they purchase an energy-efficient apartment.

Not only the location, but also the type of property will play a larger role in the purchase price in the future. Heat waves are causing demand for attic apartments to fall significantly. The ImmoScout24 portal has updated an analysis from 2025 for the Handelsblatt.

The result: On the rental market, the gap in demand between attic apartments and comparable apartments has continued to widen in the summer of 2026 - especially if there is no heat protection. These include air conditioning, roller shutters, blinds, thermal insulation or better insulation.

In June and July 2026, attic apartments without heat protection received 40 percent fewer contact inquiries than comparable apartments. In the same period last year, the gap was 33 percent. For apartments with heat protection, the difference is significantly smaller: Here, the shortfall in demand was currently 22 percent, after 20 percent in the previous year.

“Extreme heat in the summer months makes these apartments unattractive for many seekers,” says Daniel Hendel, managing director of Immoscout24. The lack of barrier-free access and limited living space due to sloping roofs reinforced this effect.

Anyone looking for an apartment or house in Germany is increasingly paying attention to a feature that was long considered a questionable option in this country: air conditioning. In June alone, the classifieds platform registered more than 23,500 corresponding search queries. The monthly average for 2026, however, is so far just under 6,000.

In June and July 2026, a total of around 34,700 targeted searches were made for properties with air conditioning. In the same period last year there were only around 10,300 search queries. Search interest has more than tripled.

Immoscout24 has also noticed such a trend. In the summer of 2026, the demand for temporary apartments with air conditioning on the portal was 131 percent above the value in July 2024. According to the analysis by Immoscout24, it fell by eleven percent for offers without air conditioning in the same period.

Real estate expert Bienert believes that the cooling factor has so far been underestimated. “The last heat waves have shown many people how much comfort air conditioning means in the residential sector,” he says. His forecast: Existing and functioning cooling is likely to become an attractive factor in its own right - similar to balconies and outdoor seating after the pandemic.