ENERGISING PROPERTY VALUATION IN EUROPE
||Leopoldsberger, Gerrit; Bienert, Sven; Bobsin, Kerstin
||ENERGISING PROPERTY VALUATION IN EUROPE
||17th Annual European Real Estate Society Conference in Milan, Italy
||Eventually the sustainability movement has achieved the real estate industry. Since the “Stern Review” was published in 2006 governments all over the world are trying to reduce the most obvious ecological hazards that are responsible for the climate change. While the existing building stock uses around 40% of the overall consumed energies the real estate industry as well as real estate researcher, i.e. the real estate professions are discussing phrases like “green buildings“, “sustainable buildings“, Triple Bottom Line (TBL) and corporate social responsibility (CSR). In Europe the European Energy of Buildings Directive (EPBD - 2002/91/EC) was launched in 2002. Due to the Directive EU member states had to develop specific measurable values, which illustrate the overall energy-efficiency of a building. Furthermore Energy Performance Certificates (EPC’s) are mandatory when buildings are sold or let since 2006. Finally the EPC illustrates the status quo of the overall energy-efficiency of a subject existing or newly developed building. Due to the ongoing activities like for example energetic refurbishments the question arises if energy efficient buildings are able to achieve a higher market value than non-efficient buildings. Therefore the European Commission is granting the IMMOVALUE project, which is aimed at using key figures of the EPC to assess the energy-efficiency of a building and put them into value. But how it could be possible to integrate this single issue into property valuation? Therefore the project on the one hand collected and assessed the existing valuation methodologies and on the other hand the configuration of some launched national EPC’s. International measuring scales, like the sustainability certifications of BREEAM or LEED, are quite different and therefore not comparable. Additionally it can be stated that it is the same about the national EPC’s all over Europe. Basically every property valuation reflects the subject property in the local property market. The task of the valuer is to compile all property facts and estimate their quality and marketability in comparison to the property market to demonstrate the valuation process in a transparent and replicable way. One aspect should be the status quo of the energy-efficiency and/or the sustainability characteristics of the property being valued. Besides the descriptive integration it should be proven if some quantitative, i.e. monetary premium or discount on value, has to be considered. Therefore the possibility of regression analysis and furthermore hedonic pricing models were tested in a selected property benchmarking stock. This analysis method is able to examine the effect of a special characteristic, i.e. energy-efficiency and it’s related features, while further price regulating characteristics are assumed to be either stable or changed in specific steps. In this paper we will focus on showing up a possibility of integrating energy-efficiency aspects into property valuation when a significant correlation to market value influencing parameters can be proved right.
||EPBD, EPC, real estate valuation, energy-efficiency, market value, hedonic pricing models
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