Galvin, R (2023) How prebound effects compromise the market premium for energy efficiency in German house sales. Building Research & Information, 51(5), pp. 501-517. ISSN 0961-3218
Abstract
Recent studies indicate that houses with higher energy efficiency usually have higher market prices, a 'market premium for energy efficiency'. But in Germany the usefulness of this premium is confounded by the 'prebound effect': the gap between officially certificated energy ratings and actual energy consumption. Attempts have been made to close this gap from two complementary directions: downwards, by obtaining more accurate and less pessimistic technical estimates of idealised energy performance; and upwards, by estimating how much energy occupants realistically need for health and comfort. This study investigates prebound effects alongside an analysis of house prices in Germany, using a large database of house sale advertisements from 2007 to 2021, focusing on pre-1980 homes that were re-sold in 2019–2021. It uses ordinary least-squared multivariate regression to estimate market premiums for energy efficiency and sets these alongside estimates of prebound (and rebound) effects. It finds that prebound effects can lead purchasers to overestimate future energy savings and therefore pay more for properties than their actual worth. It also offers simple models to help purchasers interpret energy ratings more critically and estimate likely energy savings more realistically. Finally, it suggests how policymakers could modify energy ratings to reflect likely energy consumption more accurately.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | energy-efficiency renovation; German real estate market; market premiums for energy efficiency; prebound effect; rebound effect |
| Index terms: | Germany, energy-saving, house price, comfort, energy consumption, efficiency, estimate, estimating, energy efficiency, real estate, purchaser, energy performance, rebound effect, database, renovation |
| Subjects: | data management, renovation and retrofit, economic analysis, performance management, financial and cost management, energy systems, real estate economics, occupational health and safety management, sustainability and energy, sociology, Geography |
| Topics: | Digital Applications, Stakeholder Management, Sustainability, Engineering Principles, Health and Safety, Cost Management, Business Strategy, Quality Management, Urban Studies, Geographical Context |
| Descriptive scope: | 2 PC |
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