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The impact of energy certificates on sales and rental prices: a comparative analysis

Author

Listed:
  • Alesia Gerassimenko
  • Laurens Defau
  • Lieven De Moor
Abstract
Purpose - The current literature on energy certificates shows that Energy Performance Certificate labels have an important effect on real estate prices. However, interestingly, the limited studies that address the rental market find significantly lower price premiums than the sales market. The purpose of this paper is to add to this literature, by doing a comparative analysis of price premiums in the sales and rental market in Flanders (Belgium). Design/methodology/approach - This study uses a hedonic regression model to analyze 177,670 real estate listings between 2016 and 2021. The data is provided by Immoweb – the largest online real estate platform in Belgium. The data set was divided in sold and rented properties: the authors evaluated 126,217 sales listings and 51,453 rent listings. Findings - The results confirm that energy efficient properties generate a price premium, but that this premium is significantly larger in the sales market than in the rental market. In addition, the findings indicate that both investors and landlords could benefit strongly from renovating dwellings – especially when renovating from an F label to an A label. Originality/value - Previous research focuses strongly on the sales market, although in many countries the rental market is similar in size and responsible from much energy consumption. Interestingly, the few studies that are addressing the rental market, find singificantly smaller price premiums than in the sales market. The findings add to this literature tradition and offer a comparative analysis of price premiums in the sales and rental market in Flanders. This allows us to not only show the similarities between both markets but also highlight the differences – creating valuable insights for academia, governments and real estate professionals.

Suggested Citation

  • Alesia Gerassimenko & Laurens Defau & Lieven De Moor, 2023. "The impact of energy certificates on sales and rental prices: a comparative analysis," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 17(5), pages 1267-1281, May.
    • Handle: RePEc:eme:ijhmap:ijhma-03-2023-0041
    DOI: 10.1108/IJHMA-03-2023-0041
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    More about this item

    Keywords

    Energy labels; Real estate; Housing market; Price premiums; EPC; Energy efficiency; R30;
    All these keywords.

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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