The evolution of energy efficiency impact on housing prices. An analysis for Metropolitan Barcelona

The Energy Performance of Buildings Directive has it made mandatory to include an energy performance certificate (EPC) on real estate advertisements so as to promote efficient properties. Previous research has found a positive correlation between residential prices and EPC’s energy ranks; nonetheless, the analysis of the evolution of such impact for the same market is still pending. This paper tries to shed light on this issue by analyzing the evolution of prices of the second largest urban agglomeration in Spain. In doing so, a pooled hedonic model is carried out departing from selling listing prices of apartments and a set of locative control variables. Results suggest that in a short period the energy premium for multifamily houses has positively evolved. As a result, a sharped market differentiation arises between inefficient and energy saving dwellings. Such findings have significant implications for the construction and real estate industry, since higher selling prices may compensate for higher building costs coming from energy efficient technologies.