The economic value of sustainability. Real estate market and energy performance of homes

The energy transition and decarbonisation require a
major transformation of the housing stock. Responsible
for around 40% of fossil fuel consumption and 30% of
CO2 emissions, the built heritage must be upgraded in
terms of energy performance. The issue is particularly
sensitive for Italy, where seven out of ten homes are in
the worst energy classes according to the classification
introduced by the EU.
The research aimed at investigating whether, and to
what extent, energy-efficient homes command a
premium price on the market compared to less efficient
homes. The study focused on three medium-sized cities
in northern Italy and developed three hedonic models
based on more than 900 ask prices.
The results confirm the stratification of the market in
terms of energy efficiency levels. Estimates converge in
absolute and relative terms between different cities.
Particularly significant is the average gap found between
properties in the highest efficiency class (Class A) and
those in the lowest efficiency class (Class G), with
values of around thirty percentage points, while the gap
is around fourteen percentage points if we consider
properties in Class D compared to Class G.
The conclusions are in line with European studies on
the subject, but show a trend towards an increasing gap
between the market values of properties with different
energy performance classes