Introduction
The Climate Change Act 22 of 2024 (“Climate Change Act”) marks a critical turning-point in the nation’s approach to environmental governance and is aimed at gearing South Africa towards a more environmentally-sustainable and climate-resilient future (Business Tech 2024). The areas of law impacted by the Climate Change Act are vast – ranging from administrative law, procurement law and commercial law to labour law, environmental law and energy law. This article aims to discuss the intersection between the Climate Change Act and real estate law in particular, and explore the far-reaching implications of climate change on the real estate sector in forthcoming years,
By mandating climate resilience and environmental sustainability, real estate law must swiftly adapt to the evolving standards around energy efficiency, land use and environmental governance, while property owners and developers as well as real estate investors face not only challenges but also opportunities to position themselves favourably in the market. Climate change is no longer a peripheral or ancillary issue – it has now become a vital component of real estate law, reshaping how property is to be developed, managed and regulated.
What is the nexus between the Climate Change Act and real estate?
In terms of section 24 of the Constitution of the Republic of South Africa, 1996 (“Constitution”), everyone has the right to an environment that is not harmful to their health and wellbeing and to have the environment protected for the benefit of present and future generations through reasonable legislative and other measures to prevent pollution, promote conservation and facilitate ecologically sustainable development.
On 23 July 2024, the Climate Change Act was assented to and later brought into operation on 17 March 2025. While the Act’s initial enforcement mechanisms are primarily targeted at high-emitting industries, its long-term effects will undoubtedly influence property development, valuation and market demand. The Climate Change Act is anticipated to impact real estate through mandating climate considerations in government procurement and environmental impact assessments (“EIAs”) – which are used to identify, predict and evaluate the potential environmental, social and cultural impacts of a proposed project, plan, or policy before its implementation is approved. As a result, we will likely see an increasing demand for sustainable building materials, more stringent building standards, a growing need for climate-resilient infrastructure in high-risk areas and evolving real estate investment criteria (Harcourts SA).
How does climate change impact the value of property?
Over the years, property owners and developers have become more conscious of environmental factors and its influence on property value and real estate investments. Climate change presents, inter alia, risks of rising temperatures, shifting weather patterns, water scarcity, wildfires and a disruption in ecosystems (Property Law and Climate Change 2024). With this growing consciousness, South Africa’s real estate sector is likely to evolve as properties with economically, socially and environmentally sustainable features and those situated in climate-resilient areas are expected to grow in demand and value. Thus, through employing proactive practices and prioritising sustainability, property owners and developers can both enhance the value of their properties and position themselves favourably in the market (McKinsey & Company 2022).
How will the Climate Change Act influence the future of real estate?
The Climate Change Act obliges national, provincial and municipal governments to co-ordinate mitigation and adaptation efforts to manage climate change, set greenhouse gas emission caps and integrate climate risk into project planning (Chapters 4 and 5 of the Act). Thus, failure to harmonise the efforts of all three tiers of government may lead to fragmented policy and inconsistent enforcement of the Act’s provisions (Unpacking the South African Climate Change Act 2024), ultimately leading to disparities in property value and environmental governance in the real estate market.
Furthermore, property owners and developers – particularly of large commercial properties – face growing pecuniary pressure due to carbon taxes, mandates for energy efficiency upgrades and more rigorous environmental assessments (“EAs”).
How could property owners and developers adapt to these challenges?
To stay compliant while also gaining a competitive edge, property owners and developers may adopt various strategies to enhance their properties’ resilience to climate impacts. These may include featuring climate-resilient interior and exterior design such as elevating structures in flood-prone areas, using carbon-neutral or locally sourced construction, integrating green or renewable energy systems and installing smart water management (Harcourts SA). As seen over the years, resilient landscaping not only enhances a property’s value and functionality, but it also contributes to long-term sustainability goals and the mitigation of climate impacts.
Conclusion
The Climate Change Act is more than just environmental – it is a catalyst for transformation within South Africa’s real estate market. By compelling property owners and developers – and even investors – to align with sustainability and resilience goals, the Climate Change Act has the potential to reshape the very foundation of real estate law and practice. While compliance may present challenges, it also opens doors to innovation, greener real estate and investment opportunities as well as long-term value creation. In this light, the real estate market will likely experience a decisive shift to sustainable growth and climate change consciousness.
Works cited
Articles:
Seth Thorne “What South Africa’s new climate change laws mean for businesses” Business Tech
https://businesstech.co.za/news/government/784466/what-south-africas-new-climate-change-laws-mean-for-businesses/ (accessed 14 September 2025).
“Property Law and Climate Change” Centre for Climate Engagement
https://lawclimateatlas.org/resources/property-law-and-climate-change/#ib-toc-anchor-3 (accessed 14 September 2025).
Anthony Colegrave “Unpacking the South African Climate Change Act” White & Case
https://www.whitecase.com/insight-alert/unpacking-the-south-african-climate-change-act#:~:text=Conclusion,cooperative%20legal%20and%20administrative%20response%E2%80%9D. (accessed 14 September 2025).
Harcourts SA “The Effects of Climate Change on South African Property Values” Harcourts
https://www.harcourts.co.za/news/the-effects-of-climate-change-on-south-african-property-values/#:~:text=According%20to%20The%20South%20African,the%20value%20of%20their%20properties. (accessed 14 September 2025).
Brodie Boland, Cindy Levy, Rob Palter & Daniel Stephens “Climate Risk and the Opportunity for Real Estate: Real-Estate Leaders Should Revalue Assets, Decarbonize, and Create New Business Opportunities. Here’s How.” McKinsey & Company
https://www.mckinsey.com/~/media/mckinsey/industries/real%20estate/our%20insights/climate%20risk%20and%20the%20opportunity%20for%20real%20estate/climate-risk-and-the-opportunity-for-real-estate-v3.pdf (accessed 14 September 2025).
Constitutions:
Constitution of the Republic of South Africa, 1996.
Legislation:
Climate Change Act No. 22 of 2024.
While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of the articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes and should not be construed as legal advice.
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