How different are dwellings whose energy efficiency impacts price formation?. Issue 4 (September 2019)

• Record Type: Journal Article
• Authors: Chen, Ai; Marmolejo-Duarte, Carlos
• Is Part Of: IOP conference series. Volume 603:Issue 4(2019)
• Publication Date: 2019-09
• Subjects: Materials science -- Periodicals; 620.1105
• DOI: 10.1088/1757-899X/603/4/042015
• Languages: English
• ISSNs: 1757-8981

Abstract

Abstract: Housing energy-efficiency has become a relevant issue since it is mandatory to exhibit an Energy Performance Certificate (EPC) when transacting real estate in the European Union. A number of studies have focused on energy-efficiency marginal prices using hedonic models from cross-sectional and longitudinal perspectives. Some of them have found that the increase of relevance of EPC ranks (i.e. marginal prices) is not the same for all the A-G classes. This study aims to explore the differences in terms of architectonic and location attributes between the apartments depicting an increase of EPC ranking marginal prices regarding those where energy efficiency seems not to play a role in price formation. In doing so, a pooled spatial error hedonic model is done using selling information for multifamily housing in Barcelona for the years of 2014 and 2016. Furthermore, it is shown which EPC ranks do exhibit an increase in terms of marginal prices in the period studied. Finally, we compare the architectonic and locative attributes for the set of homes where the energy efficiency has increased in terms of price importance to the set of homes where it has not increased. The results suggest that dwellings with high and medium EPC ranks (e.g. A for 2014; and B, C and D for 2016) are more expensive, larger and boasting of better architectonic qualities than the rest of homes where EPC ranks failed to have a role in price formation. On the contrary, the location attributes are different: while A-ranked dwellings of 2014 are located on peripheries where new housing completions are placed; B, C and D-ranked homes of 2016 are located in more centric locations. These findings have implications for future analysis regarding the energy premium and energy poverty, since specific characteristics in different submarkets may have a different impact on housing prices.