Renewable energy is key to stabilizing property values: Study

Despite a recent decline in the value of properties with poor energy performance, a new study by real estate experts suggests that this trend may have come to an end. The study shows that older, unrenovated houses are still seeing a decrease in value, but the costs of energy-saving renovations are almost equivalent to the price difference between old and new properties.

The stabilization in property values is mainly due to the fact that construction costs have stabilized and even declined in some trades. The costs of financing have also stabilized after a rise in interest rates. In the first quarter of the year, there was only an average price difference of 25.1 percent between apartment buildings with top energy efficiency ratings (A/A+) and the worst ratings (G/H), compared to 26.9 percent at the end of last year.

Energy efficiency is becoming increasingly important in property purchasing decisions as rising prices for electricity and gas continue to impact buyers’ decisions. The new law on heating replacement by the federal government has also caused uncertainty in the market, with owners of single- and two-family homes having to reduce prices significantly more when selling if buyers choose to live in the property themselves.

Selling unrenovated properties remains difficult, especially in rural areas where buyers may struggle to offset the costs of expensive energy-saving renovations with lower rental income. According to expert Sören Gröbel, this gap between old and new properties is expected to widen further.

Despite these challenges, there is some encouraging news for property owners: while selling unrenovated properties remains difficult, there has been a slight improvement in property values overall. Energy efficiency is becoming a key factor in property valuation and purchasing decisions, signaling a positive shift in the real estate market.

In conclusion, despite challenges such as rising energy costs and uncertainty around heating replacement regulations, properties with good energy performance are showing stable or increasing value while unrenovated properties remain difficult to sell due to their high costs of maintenance or renovation required for better energy efficiency.