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Energy price shock and housing market dynamics: Evidence from Germany

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  • Sagner, Pekka

Abstract

This paper analyses the impact of the energy price shock following Russia’s invasion of Ukraine in 2022 on housing market dynamics in Germany, focusing on the price differences between the most energy-efficient dwellings (MEED) and less energy-efficient dwellings (LEED). Using a difference-in-differences approach and a comprehensive housing market dataset, the study finds that LEED have seen relative price declines in the purchase and rental market, reflecting a growing premium for energy efficiency. The analysis reveals heterogeneity across regions, property types, and years of construction. The paper contributes to the literature on energy price premiums in the housing sector, providing empirical insights into how rising energy costs and policy measures, such as the Energy Performance of Buildings Directive (EPBD) and CO2 pricing, may shape long-term housing market dynamics. The findings additionally indicate that energy efficiency plays a more significant role in housing valuations, carrying important implications for housing policy and market stability in the short and long term.

Suggested Citation

  • Sagner, Pekka, 2026. "Energy price shock and housing market dynamics: Evidence from Germany," Journal of Housing Economics, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:jhouse:v:71:y:2026:i:c:s105113772600001x
    DOI: 10.1016/j.jhe.2026.102119
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