Energy Performance and Housing Prices

Abstract

We investigate whether mandatory energy performance certificates of existing residential properties contribute to property price premiums after the implementation of the EU directive on the energy performance of buildings in the Swedish private housing market. Analysing mandatory energy performance certificates of the 2009-2010 private housing transactions, we find that energy performance is associated with transaction price in situations when it is conditional on a reference benchmark. We also document property price premiums for energy performance within housing segments built before 1960 and those with a lower transaction price per square metre. Our results suggest that the property market values energy performance, and we make recommendations on which housing segments need policy support to encourage energy improvements.

Buildings Energy Performance in a Market Comparison Approach

“…Further studies in Europe, Australia, the United States, and Singapore confirm findings that residential buyers are willing to pay a premium for energy efficient housing [5][6][7][23][24][25][26][27][28], although some papers have produced more mixed results [11,12,29,30].…”

“…Buildings account for 40% of the energy consumption in Europe [1], and residential homes contribute to around one sixth of emissions globally [2]. Supplementary literature has begun to emerge on the willingness to pay for energy efficiency [3][4][5][6][7][8][9][10], whether energy savings are considered in buying decisions [11,12], and if financing should stem from private or public sources [13][14][15][16].…”

La incidencia de la calificación energética sobre los valores residenciales: un análisis para el mercado plurifamiliar en Barcelona

“…Cerin et al (13) concluyeron que en las viviendas suecas situadas en el cuartil inferior de precios la correlación entre eficiencia energética y precio es negativa, es decir, a mayor eficiencia menor precio. Asimismo, en el segmento superior de viviendas más caras la eficiencia energética resultó ser no significativa.…”

Handling data uncertainties when using Swedish energy performance certificate data to describe energy usage in the building stock

“…The purpose of the Swedish EPC is to promote energy usage reducing measures by making the actual yearly cost of energy usage visible when buildings are sold [16]. This is different from how other European member states have implemented the EPC [17][18][19] and has had implications on data required for the Swedish EPC, see Table 1.…”

“…The Swedish EPC system has been criticized by practitioners and academics for being inaccurate, expensive [10,23] and not usable for the purpose of advising building owners on how to reduce energy usage [24]. Neither has it achieved the goal of making building purchasers pay more for a building that demands less energy [18,25,26]. However, the data generated in the EPC process can be used for the purpose of generating a comprehensive overview of energy usage in the building stock, if data quality issues are solved.…”