Speaker
Description
This article analyses the impact of the Flemish energy renovation obligation on house prices. Introduced in January 2023, the policy requires buyers of the most energy-inefficient homes to renovate within five years of purchase to obtain at least a class D energy performance certificate (EPC). Using a difference-in-differences technique and a unique dataset that merges Belgian dwelling transaction data with EPCs, asbestos certificates, and online real estate listings, we find that energy-inefficient houses in the Flemish Region became approximately 2% cheaper. This result holds across multiple control group specifications: relative to similar houses in the Walloon Region, to those with a class D EPC in Flanders, and in a triple difference-in-differences estimation comparing price differentials between EPC classes across both regions. The relatively limited price effect is explained by two factors. First, most buyers of energy-inefficient homes were already renovating to at least class D. Second, renovation costs were largely priced in before the policy’s introduction. The slightly higher discount for energy-inefficient homes provides some financial leeway for buyers to carry out renovations. However, for those not planning to renovate, the obligation imposes a substantial investment, potentially reducing access to home ownership for buyers with limited repayment capacity. As Flanders is the only region worldwide to have introduced an energy renovation obligation for homebuyers, our findings may be of interest to other countries considering similar policies to accelerate residential energy efficiency improvements.
| If your abstract is not accepted for an oral presentation, would you be interested in presenting it as a poster instead? | No |
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| If accepted by the Scientific Board, I agree to have my presentation/poster and abstract published on the Belgian Climate Centre websites and social media. | Yes |
