The Relevance of EPC Labels in the Spanish Residential Market: The Perspective of Real Estate Agents

Abstract

Assessment regarding the impact of Energy Performance Certificates (EPC) on the residential market is largely inconclusive; while the majority of hedonic analyses have found EPC ratings to be correlated with prices, opinion-based research has found a negligible impact on prices and other marketing variables. Using the opinion of qualified real estate agents, this paper explores whether, in Spain, EPC labels play any role in housing marketing, as well as the policy changes required to foster efficient dwellings. The results reveal a large misunderstanding of the EPC labels, since they are seen as a global home-quality indicator, while their impact on residential marketing is quite poor. Apparently, both supply and demand place a small interest in energy performance, although it is slightly larger for sellers/buyers in relation to lenders/tenants. In any case, EPC labels are far from blurring the energy information asymmetry, since most of the buyers/tenants are informed of the EPC rating after having selected their home. Overall, the EPC scheme has a poor reputation exacerbated by inaccuracies, unintelligible units to express the financial and environmental implications of energy efficiency, and an apparent weak supervision. These findings stress the need to improve the scheme; in doing so, realtors suggest the need for some companion policies.