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The city of Bangkok at night (Image: Andreas Brucker)
In the discussion around the impact of climate change, property is usually not considered beyond how buildings can be more or less green. PropertyGuru’s 2023 group sustainability report is an interesting read to look at how the digital platform is looking to encourage sustainable living.
Demand and supply
Since PropertyGuru is a digital property marketplace in Southeast Asia, some may be puzzled about the possible impact that company can have on sustainability.
The answer is that the real estate sector is responsible for 40% of global carbon dioxide emissions. Approximately 70% of the emissions are produced by building operations, so the energy used to drive everyday living, while the remaining comes from the construction of the buildings.
An example of the Green Score (Image: PropertyGuru)
According to PropertyGuru, this green score could contribute to a change in consumer demand, where sustainable housing projects and developments are increasingly valued by consumers.
With the change in demand, developers and the wider real estate industry may be encouraged to prioritise sustainability when researching and developing new properties.
Disaster strikes
Furthermore, climate change is also causing increasingly erratic and severe weather activity around the world. This weather impacts infrastructure, and those living inside the walls.
For example, earlier this year, heavy rainfall in Dubai overwhelmed its buildings. The buildings were made to accommodate Dubai’s arid climate, and when the unexpected rainfall arrived, many buildings were flooded.
Buildings that account for such extreme weather may also become more popular with customers worldwide, as these properties will be more resistant to disasters, and offer more protection to consumers.
Spending for a rainy day
To account for the erratic climate, PropertyGuru has partnered with climate risk software developer Intensel.
Intensel references the data that PropertyGuru has on its various listings and combines satellite imagery with modelling to assess the risk of flooding, storms, heat, and other extreme weather events on the properties.
Customers can then reference the climate risk assessments to assess the risk that climate change has on the properties that they are considering, and then consider this risk in their investments.
Consider how properties in Malaysia are susceptible to recurrent flooding because of development processes, urban planning, and annual monsoons in the country. Someone seeking to purchase a property in Malaysia may then search for properties located on higher ground to reduce the risk of flooding, or may search for buildings that incorporate robust drainage systems.
Community level
What property seekers are searching, guided by these new metrics may be confusing to other stakeholders in the industry. For these real estate stakeholders, PropertyGuru is also incorporating a liveability index.
Liveability is a term often used in geographical and urban studies that considers what it is like to live in a particular location, considering criteria like environmental quality, safety, and the community.
Notably, PropertyGuru’s definition of liveability primarily looks at financial considerations. Its liveability index considers the environment, such as the air quality, rainfall, and temperature; and neighbourhood amenities, like community engagement and well-being.
The index also considers transport accessibility to key locations, specifically naming employment clusters as one; housing prices, comparing the prices and rents to median household income; and opportunities to develop professionally and financially. To calculate the last factor, PropertyGuru looks at the growth in local opportunities, references rental costs, and the demand for commercial properties in the region.
An example of the liveability index (Image: PropertyGuru)
Scores are positioned relative to each other, and the factors used to measure each point evolve as the area evolves, allowing stakeholders to get an updated understanding of what property owners in each region are searching for. Presently, the index is being piloted in Kuala Lumpur, Malaysia.
By including these new metrics, PropertyGuru appears to be encouraging customers to consider sustainability and vulnerability of the properties that they look at. This will likely contribute to the existing increasing trend of people prioritising the climate.
As property seekers are encouraged to purchase buildings with environmental considerations in mind, the increased demand for more sustainable properties could contribute to a change in the way that properties, particularly those in the rapidly developing Southeast Asia, are constructed. Furthermore, liveability index is well positioned for stakeholders to reference and consider when planning future projects.
Perhaps Southeast Asia will soon be a hub of sustainable living.
