A climate-adjusted analysis of value and rent premia through energy-efficiency in German residential properties
||Hahn, Jonas; Jens Hirsch, Sven Bienert
||A climate-adjusted analysis of value and rent premia through energy-efficiency in German residential properties
||23rd Annual European Real Estate Society Conference in Regensburg, Germany
||Previous research has found that energy consumption of properties affects the user’s or buyer’s willingness to pay and as a consequence achievable rent or purchasing prices. These so-called ‘green premia’ for higher quality in energy efficiency and energy consumption can be observed in terms of sales prices as well as on the German rental market, where the sharing of costs for energetic modernization is regulated between landlords and tenants and leads to increasing rents. Also, lower operating costs are frequently connected to increased net rents and achievable prices. In order to provide further evidence, we construct a multivariate regression model and perform estimations incorporating observations on energy consumption and asking prices in German residential markets in order to isolate and to control for the effect of several driving impact factors on asking prices of landlords and sellers.This study provides current insights into ‚green‘ value and rental price premia due to energy efficiency. In addition to conventional approaches, we consider differences in regional climate on the basis of the regionally different heating and cooling degree days (HDD and CDD); by this neutralization, we generate insights that make green premia in property values and rents comparable within Germany’s regional diversity.
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