Real estate is increasingly counting the cost of extreme weather events. As they grow in frequency and severity, the bill for repairing the damage and restoring business as usual is soaring.

In 2024 alone, 27 billion-dollar extreme weather events in the U.S. caused an estimated $182 billion of damage, according to NOAA data.

Across the U.S., commercial real estate premiums have soared 88% over the last five years, according to JLL. By 2030, the average monthly cost to insure a commercial building could reach US$4,890, up from US$2,726 in 2023, Deloitte forecasts.

Other regions are equally struggling with the mounting costs of extreme weather.

Across the European Union, weather- and climate-related extremes are estimated to have caused €738 billion in economic losses to assets between 1980 and 2023, with over €162 billion between 2021 and 2023, according to the European Environment Agency.

 In 2023, flooding in China led to over US$32 billion in economic losses, according to Aon, and is significantly pushing up residential insurance prices in Australia.

In response to the impact of extreme weather events, Italy passed a new law requiring climate insurance for all buildings from 1 January 2025.

"Climate risks have spurred regulatory changes to reduce the economic burden on local governments by addressing insurance coverage gaps and enforcing stricter building codes for enhancing resiliency,” says Wahib Ghazni, Senior Product Manager and Lead Financial Economist at Jupiter Intelligence.

From 2025, Paris will implement new ‘bioclimatic’ town planning regulations to create more resilient buildings. These include requirements around low carbon construction materials, renewable energy production on buildings over 1,000sqm, and nature and green space on roofs.