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How Does Energy Efficiency Affect House Prices?

How Does Energy Efficiency Affect House Prices?

House prices are driven by a range of attributes including size, location and type of dwelling. However, energy efficiency does have a positive effect on housing prices in urban areas. The benefits of energy efficiency measures can be substantial and should not be overlooked by home owners.

Generally speaking, homes that are energy efficient tend to be more comfortable to live in, resulting in higher selling prices. Energy-efficient homes do not have large utility bills. These improvements should be included in the listing, enabling prospective buyers to see the value of these changes.

According to a study by the Nationwide Mortgage Company, energy-efficient houses are worth more than their less-efficient counterparts. This is based on an analysis of 365,000 house sales observations. They found that a high grade of energy efficiency has an impact on the asking price, ranging from 0.9 to 1.1 percent.

While there are some differences in how energy efficiency affects house prices across regions, a robust regression shows that the impact of the effect is weakest in cities. In contrast, the effect is significantly stronger in a sample of high-energy rated NABERS buildings.

Several studies have examined the relationship between energy efficiency and housing prices. However, these studies have primarily used data from single-family homes. Using an innovative experimental approach, they examined the effects of different behavioral situations.

They found that energy-efficient homes are likely to field multiple offers. Moreover, these homes have the power to demand a full price, unlike houses that are not energy efficient.

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