How Does an Increase in Energy Efficiency Affect Housing Prices? A Case Study of a Renovation
||McLean, Aliz; Áron Horvath, Hubert Janos Kiss
||How Does an Increase in Energy Efficiency Affect Housing Prices? A Case Study of a Renovation
||Book of Proceedings of 20th Annual European Real Estate Society Conference in Vienna, Austria (ISBN: 978-3-85437-323-0), pp. 39-55
||This paper presents a case study from Hungary on the effect of greater energy efficiency on residential housing prices, using a dataset on real estate transactions. The sample consists of all transactions from 2003 to mid-2012 in a treatment and a control group in Budapest's third district.The paper uses a difference-in-differences framework to test whether prices in a large block of flats - the largest in Hungary - which underwent major energy-efficiency related renovation developed differently following the renovation than prices in comparable, neighbouring blocks. Our results show that the renovation resulted in prices 9.42% higher than they would have been absent the renovation, which amounts to over 1 million Hungarian forints on the average flat. This can be contrasted with around 70 thousand forints in yearly energy savings and the 1.3 million forint cost of the renovation per flat. The latter implies that outside funding may also be required to make investment into energy-efficient renovation worthwhile.
||Energy efficiency, Program evaluation, Renovation, Transaction data, Hungary
||file.pdf (1,760,100 bytes)
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||D-7: Housing Markets & Economics
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