Energy performance certificates in the Turin real estate market

Abstract

Purpose The purpose of this paper is to assess the impact of the Energy Performance Certificate (EPC) on the Italian real estate market, focusing on old buildings. The contribution of EPC labels to house prices and to market liquidity was measured to analyze different aspects of the selling process. Design/methodology/approach A traditional hedonic model was used to explain the variables of listing price, transaction price, time on the market and bargaining outcome. In addition to EPC labels, the building construction period and the main features of apartments were included in the model. A sample of 879 transactions of old properties in Turin in 2011-2014 was considered. Findings A first hedonic model let us suppose that low EPC labels (E, F and G) were priced in the market although EPC labels explained only 6-8 per cent of price variation. A second full hedonic model, which included apartment characteristics, revealed that EPC labels had no impact on prices. Originality/value In Italy EPC has been mandatory for house transactions since 2009, so there are few studies on the effect of EPC on the Italian real estate market at least to our knowledge. Furthermore, unusually for the Italian context, in this paper also transaction prices were analyzed, in addition to the more frequently used listing prices.

Monitoring and Analysis of the Real Estate Market in a Social Perspective: Results from the Turin’s (Italy) Experience

“…The results show a weak (in correspondence to a low level of EPC) or absent influence, even in the model tested with Microzones clusters. In a following study [53], assuming also the literature of the previous work, the impact of the EPC on house prices and to market liquidity is analyzed, considering old buildings. A hedonic model is applied to explain the variables of listing price, transaction price, time on the market and bargaining outcome, considering a sample of about 900 transactions in Turin (period 2011-2014).…”

“…Building construction period distribution, per Microzone, on the left; building EPC level distribution, per Microzone, on the right. (Source:[53]). …”

Assessing Social and Territorial Vulnerability on Real Estate Submarkets

“…Furthermore, the model showed that the variables "building quality" and "apartment condition" significantly influenced price values. On the contrary, other variables such as the building typology, the Energy Performance Certificate (EPC) label and the presence of a lift had a low influence on prices and for this reason they were not included in the model [39,42].…”

“…Furthermore, in Italy house prices are commonly measured in Euro per square meter by buyers, sellers and real estate institutional web sites. We therefore decided to consider the variables' influence on prices measured in Euro per square meter, as outlined in other studies, which analysed the Italian real estate market [35][36][37][38][39]42].…”

“…Nevertheless recent studies showed that the use of listing prices for studying the real estate market and estimating house values is viable. This is due to the fact that agents and sellers tend to correctly determine property prices and predict the influence of observable characteristics of buildings and apartments in the process of price determination [35][36][37][38][39].…”