Epc labels and building features: Spatial implications over housing prices

Abstract

The influence of building or dwelling energy performance on the real estate market dynamics and pricing processes is deeply explored, due to the fact that energy efficiency improvement is one of the fundamental reasons for retrofitting the existing housing stock. Nevertheless, the joint effect produced by the building energy performance and the architectural, typological, and physical-technical attributes seems poorly studied. Thus, the aim of this work is to investigate the influence of both energy performance and diverse features on property prices, by performing spatial analyses on a sample of housing properties listed on Turin’s real estate market and on different sub-samples. In particular, Exploratory Spatial Data Analyses (ESDA) statistics, standard hedonic price models (Ordinary Least Squares—OLS) and Spatial Error Models (SEM) are firstly applied on the whole data sample, and then on three different sub-samples: two territorial clusters and a sub-sample representative of the most energy inefficient buildings constructed between 1946 and 1990. Results demonstrate that Energy Performance Certificate (EPC) labels are gaining power in influencing price variations, contrary to the empirical evidence that emerged in some previous studies. Furthermore, the presence of the spatial effects reveals that the impact of energy attributes changes in different sub-markets and thus has to be spatially analysed.