Investment in sustainable buildings: The role of green building assessment systems in real estate valuation

Abstract

In Austria, the building sector accounts for more than one-third of energy consumption and material flows. There are several instruments to improve building quality in terms of environmental performance, such as building codes, subsidies, and voluntary building assessment schemes. In this paper, the focus is on mandatory and voluntary building assessment schemes and their role in real estate valuation. Real estate valuation is based on calculation methods and on the assessment of market demand. Therefore, if there is a demand for energy efficient and sustainable buildings on the market, high performance buildings will be better valued than average buildings. Building assessment schemes serve to create awareness for the benefits of high performance buildings, thus increasing the market demand. However, work is also done on further developing real estate valuation calculation methods, in order to identify risks for future valuations that might be connected with, for example, the energy consumption and material properties of the respective building. This paper presents the findings of a project on further developing real estate valuation methods by taking environmental performance into account. It describes the voluntary building assessment schemes and the mandatory energy certification scheme applied in Austria, and then puts focus on the guideline for appraisers developed in the project. The guideline provides support on how to consider energy aspects and other sustainability aspects in building valuation.