Energy upgrading of buildings to upgrade the real estate market, or vice versa?

Adaptation to climate change depends mainly on actions undertaken in urban areas, cities being simultaneously part of the problem and its solution. The European Union and states establish ambitious policies and measures to achieve targets for the energy upgrade of buildings. New technologies are developing rapidly, but important barriers prevent their implementation in space. This paper explores the question of whether building upgrades are required to upgrade the real estate market in vulnerable urban areas, or vice versa. A deprived area of central Athens serves as a case study. Based on field research data, cases of energy renovation of buildings through a public-private partnership including state aid scheme are analysed. It is argued that for decisions to be made on the energy upgrading of buildings, both by owners and investors, in addition to the profit from reducing energy costs, there must be tangible benefits from increasing the market value of buildings and generating capital gains. Surplus values can be obtained through urban regeneration interventions. For a building, energy retrofitting is a financial investment in a capital asset and energy policies are most effective when tangible benefits are made significant, using market forces. Higher prices for energy-renovated properties can motivate owners. For a real estate investor, property value appreciation is a significant driver for energy investments and decisions are based primarily on property market fundamentals, the quality of the area in which it is located, as well as their expectations for and secondarily on the energy performance of buildings, the impact of which is incorporated into their market value. This means that the energy market is subordinate to the property market and not the opposite, as it is frequently stated.