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The Impact of Energy Performance on Single-Family Home Sales Prices in Sweden

Author

Listed:
  • Högberg, Lovisa

    (Department of Real Estate and Construction Management, Royal Institute of Technology)

Abstract

The EU Energy Performance Certificates provide new information and measure energy performance more exactly than many earlier (proxy) variables. This is one of the first studies to test the effect of this information, and the first one using Swedish data. The purpose of the paper is to test whether energy performance affects single-family house sales prices, and whether such impact is heterogeneous over house size, age and distance from city center. The paper also examines whether recommendations for supposedly cost-effective energy efficiency measures, by intervention category (construction, installation or operation/control technical measures), are perceived as untapped potential affecting sales prices. Energy performance measurement and dummy variables for three categories of improvement recommendations were included as explanatory variables in a hedonic regression analysis using transaction data and Energy Performance Certificates data for 1073 observations. The results indicate that better energy performance has a positive impact on sales price. Energy efficiency recommendations seem to have an impact on sales price; home buyers seem to require a larger “discount” for more complex types of measures. The results may imply that energy efficiency in buildings will become more important in the future, which may strengthen house owners’/sellers’ incentives to improve energy efficiency.

Suggested Citation

  • Högberg, Lovisa, 2013. "The Impact of Energy Performance on Single-Family Home Sales Prices in Sweden," Working Paper Series 13/6, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    • Handle: RePEc:hhs:kthrec:2013_006
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    Citations

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    Cited by:

    1. Kholodilin, Konstantin A & Mense, Andreas & Michelsen, Claus, 2017. "The market value of energy efficiency in buildings and the mode of tenure," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 54(14), pages 3218-3238.
    2. 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.

    More about this item

    Keywords

    Energy efficiency; energy performance; property value; hedonic model; Swedish housing market;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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