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Energy Efficiency Information and Valuation Practices in Rental Housing

Author

Listed:
  • Andrea Chegut

    (Massachusetts Institute of Technology)

  • Piet Eichholtz

    (Maastricht University)

  • Rogier Holtermans

    (University of Guelph)

  • Juan Palacios

    (Maastricht University)

Abstract

The consensus in the academic literature is that energy efficiency is associated with transaction value premiums, but it is not clear to what extent property appraisers take account of this. We decompose external appraisals of rental housing by international valuation firms in England and the Netherlands in two waves, keeping the samples of valued homes constant between these years. We find a notable change in the behavior of external property appraisers. In England, energy performance does not impact assessed values in 2012, while estimation results for 2015 show a significant discount in assessed values for D-, E- and F- relative to C-labeled dwellings. For the Netherlands, we do not observe a significant relationship between energy efficiency and assessed values in 2010, but in 2015 we find that more energy efficiency leads to higher external valuations.

Suggested Citation

  • Andrea Chegut & Piet Eichholtz & Rogier Holtermans & Juan Palacios, 2020. "Energy Efficiency Information and Valuation Practices in Rental Housing," The Journal of Real Estate Finance and Economics, Springer, vol. 60(1), pages 181-204, February.
    • Handle: RePEc:kap:jrefec:v:60:y:2020:i:1:d:10.1007_s11146-019-09720-0
    DOI: 10.1007/s11146-019-09720-0
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    References listed on IDEAS

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    Cited by:

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    2. Wim Van Opstal & Anse Smeets, 2022. "Market-Specific Barriers and Enablers for Organizational Investments in Solar PV—Lessons from Flanders," Sustainability, MDPI, vol. 14(20), pages 1-26, October.
    3. Matheus Koengkan & Nuno Silva & José Alberto Fuinhas, 2023. "Assessing Energy Performance Certificates for Buildings: A Fuzzy Set Qualitative Comparative Analysis (fsQCA) of Portuguese Municipalities," Energies, MDPI, vol. 16(7), pages 1-30, April.
    4. Elias Asproudis & Cigdem Gedikli & Oleksandr Talavera & Okan Yilmaz, 2023. "Returns to Solar Panels in the Housing Market: A Meta Learner Approach," Discussion Papers 23-01, Department of Economics, University of Birmingham.
    5. Monica Billio & Michele Costola & Loriana Pelizzon & Max Riedel, 2022. "Buildings’ Energy Efficiency and the Probability of Mortgage Default: The Dutch Case," The Journal of Real Estate Finance and Economics, Springer, vol. 65(3), pages 419-450, October.
    6. Rohan Best & Paul J. Burke & Rabindra Nepal & Zac Reynolds, 2021. "Effects of rooftop solar on housing prices in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(3), pages 493-511, July.
    7. Haonan Zhang, 2023. "Leveraging policy instruments and financial incentives to reduce embodied carbon in energy retrofits," Papers 2304.03403, arXiv.org.

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    More about this item

    Keywords

    Affordable housing; Real estate valuation; Energy efficiency; Energy performance certificates;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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