Sustainable Building Certification and the Rent Premium: A Panel Data Approach

Reichardt, Alexander; Fuerst, Franz; Rottke, Nico B.; Zietz, Joachim

doi:10.1007/978-3-658-11739-9_2

Cited by 46 publications

(52 citation statements)

References 32 publications

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“…To date, the majority of these studies have concentrated on the US commercial office market. Broadly, the findings reveal a positive relationship between environmental labels and price (see Wiley et al, 2010;Eichholtz et al, 2010Eichholtz et al, , 2013Fuerst and McAllister, 2011a,b;Reichardt et al, 2011;Deng et al, 2011). One of the first investigations of the price effect of mandatory energy labelling in a residential real estate market was carried out by the Australian Bureau of Statistics (2008).…”

Section: Energy Labelling and Real Estate Marketsmentioning

confidence: 90%

Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England

et al. 2015

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JEL Classification: R21 R28 331 C21 C81 Q58 Keywords: Energy efficiency House price Hedonic model Repeat sales modelThis paper investigates whether energy performance ratings, as measured by mandatory Energy Performance Certificates (EPCs), are reflected in the sale prices of residential properties. This is the first large-scale empirical study of this topic in England involving 333,095 dwellings sold at least twice in the period from 1995 to 2012. Applying hedonic regression and an augmented repeat sales regression, we find a positive relationship between the energy efficiency rating of a dwelling and the transaction price per square metre. The price effects of superior energy performance tend to be higher for terraced dwellings and flats compared to detached and semi-detached dwellings. The evidence is less clear-cut for rates of house price growth but remains supportive of a positive association. Overall, the results of this study suggest that energy efficiency labels have a measurable and significant impact on house prices in England.

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Section: Energy Labelling and Real Estate Marketsmentioning

confidence: 90%

Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England

et al. 2015

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“…The seminal studies (Miller, Spivey, Florance, 2008[17], Fuerst and McAllister, 2011[9], Reichardt, Fuerst and Zietz, 2012 [12] , Eichholtz, Kok and Quigley, 2010 [6], 2011 [7] and Eichholtz and Quigley 1 2012 [5] to name just a few) provided first valuable insights into the pricing of sustainable real estate. However, these studies are also characterised by important limitations.…”

Section: Introductionmentioning

confidence: 99%

Green luxury goods? The economics of eco-labels in the Japanese housing market

Fuerst

Shimizu

2016

Journal of the Japanese and International Economies

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This paper aims to extend the existing evidence on the investment value of green buildings to international markets, specifically the residential market in Japan. Using a unique transaction database of condominiums in the Tokyo metropolitan area and a hedonic analytical framework, we find that green buildings command a small but significant premium on both the asking and transaction prices. This finding is consistent with results from other countries. As far as we are aware, this is also the first study of green buildings' economic value based on a hedonic model incorporating buyer characteristics. However, further analysis reveals that this premium is primarily driven by wealthy households that exhibit a higher willingness-to-pay for eco-labelled condominiums, both as a total amount and as a fraction of the total sales price. We therefore conclude that eco-labels are perceived as a luxury good in the Japanese housing market rather than a way to save money on lower utility bills.

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“…For example, the pioneering research of Dinan and Miranowsky [52] revealed that improvements in energy efficiency applied in the real-estate market in Des Moines, Iowa, equaled a reduction in energy consumption of 1 USD (while maintaining the house at a comfortable temperature of 18 • C), which represented a market premium of 11.63 USD in price. In recent years, subsequent studies have addressed the impact of energy labelling on real-estate prices, such as the Energy Star certification [53][54][55][56], the LEED (Leadership in Energy and Environmental Design) scheme [55,56], the Energy Performance Certificates (EPC's) from the European Energy Performance of Buildings Directive [57][58][59][60][61][62][63][64], and others schemes [65], by identifying different levels in the market premiums associated with better-ranked homes. For example, the study by Bio Intelligence Service [66]-commissioned for the purpose of assessing the European Directive-reveals that the effect of each of the EPC label levels (expressed in letters) on the price ranges from 0.4% in Oxford to 11% in Vienna; it is 4.3% in Marseille, 3.2% in Lille and 2.9% in Brussels.…”

Section: The Configuration Of Real Estate Pricesmentioning

confidence: 99%

Sustainability Attributes in Real Estate Development: Private Perspectives on Advancing Energy Regulation in a Liberalized Market

Pino

Núñez²,

Duarte

2018

Sustainability

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Abstract:In real estate markets where energy efficiency certificates are not mandatory, such as Santiago in Chile, incorporating solutions that respond to the growing demand for sustainability entails a natural tension between their acceptance as necessary measures and the way they are addressed by the market. Under this mechanism, sustainability attributes have been introduced that are communicated individually through real estate promotion. A methodology consisting of two approaches was utilized to investigate the cross-validation of attributes, in terms of supply and demand, and the evolution of them in 8255 real estate advertisements for the period 2012-2017. Their positioning was more evident in higher-value homes, where they were identified as consolidated attributes, while they are considered innovations at the lower end of the market. However, as evidence suggests, sustainability attributes decline in relative importance over time, ceasing to be considered marks of distinction. This suggests that this model should be reviewed from a public policy perspective, with the understanding that the current voluntary standards must compete with other attributes. At the same time, it is necessary to make progress in the improvement of the obligatory minimum standards with the objective of establishing a more demanding baseline that incentivizes competitiveness in the market.

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Sustainable Building Certification and the Rent Premium: A Panel Data Approach

Cited by 46 publications

References 32 publications

Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England

Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England

Green luxury goods? The economics of eco-labels in the Japanese housing market

Sustainability Attributes in Real Estate Development: Private Perspectives on Advancing Energy Regulation in a Liberalized Market

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