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Are "green factors" able to drive the real estate value up?

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  • Malgorzata G. Sliczna

Abstract

In the era of ecology awareness sustainable development plays a key role. The idea of this movement touches every aspect of our lives, real estate is not different. It is said that in EU buildings are responsible for 40% of total energy consumption. It means that making our buildings more energy efficient is really crucial for climate change. Real estate sector in Poland is aware of those issues and releases the need to reduce its environmental impact.. Nevertheless green building market in Poland suffers lack of proper interest. The most important factor for green buildings market development in Poland is the value of the house which reflects environmental costs and benefits. However real estate appraisal is mainly focused on none environmental issues. It seems that despite widely propagated financial and environmental benefits for green buildings, real estate prices are not influenced by their sustainable characteristics. This study is an attempt to analyze and characterize the most popular real estate appraisal methods in Poland. All of them are closely analyzed to point the level of consideration of environmental friendly issues of the property This can highlight the green features which are the most popular and, on the other hand, the most beneficial to real estate value increase. The research seeks to remedy these problems by analyzing the literature of real estate appraisal methodology, statistic and real estate data published by real estate agencies. Some insights information gathered from real estate agencies and real estate appraisers was also taken. The result of the study indicates that real estate appraisal do not take into consideration the environmental friendly issues implemented in the building. A few factors, such as good isolation or green location, are the ones that can increase the value of the house the highest. This paper is the result of the first part of the research on green factors of the building and their influence on increasing the value of real estate. The research shows the need of changing the real estate appraisal methodology in Poland. Real estate market in Poland is still developing. This study is the first one in the field to point the new directions of development towards green buildings in Poland. The paper shows the lack of motivations for sustainable real estate to be popular, for appraisal methods are not taking into consideration “green” factors of the buildings.

Suggested Citation

  • Malgorzata G. Sliczna, 2012. "Are "green factors" able to drive the real estate value up?," ERES eres2012_120, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2012_120
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    References listed on IDEAS

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    1. World Commission on Environment and Development,, 1987. "Our Common Future," OUP Catalogue, Oxford University Press, number 9780192820808.
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    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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