1# RECORD 53f863bd54970307af93c0ba10a947b3b65b890a2# TITLE: The impact of Energy Performance Certificate level on house listing prices. First evidence from Italian real estate3# YEAR: 2015.0 VENUE: Aestimum DOI: 10.13128/aestimum-154594# AUTHORS: E. Fregonara; D. Rolando; P. Semeraro; M. Vella5# PAGES: 21 CANDIDATE TABLE PAGES (1-based): [12]6# ABSTRACT: The recent dispositions related to the energy performance of buildings, launched by the European Directives 2002/91/EC and 2010/31/EU, turned attention to the Energy Performance Certificate (EPC). The aim of this study is to investigate the economic effects of the recent Italian statutory provisions related to energy performance of buildings on listing behaviour. With this aim an hedonic regression analysis is performed, in order to measure the impact of EPC level on listing prices. The study, based on a set of more than 500 housing property asset collected in 2012 from real estate advertisements websites, is focused on the Turin real estate market as a case study. Furthermore this paper contributes to the early limited literature on implication of the impact of EPC level on Italian housing market, representing one of the first systematic evidence about the energy certifications in the housing listing prices. 789===== PAGE 1 (score 8, numeric-paren 0, table-words 0, var-words 8) =====1011AESTIMUM 65, Dicembre 2014: 143-16312© Firenze University Press 13www.fupress.com/ceset14DOI: 10.13128/Aestimum-1545915Elena Fregonara 16Diana Rolando 17Patrizia Semeraro 18Marta Vella19Dipartimento Architettura e Design, 20Politecnico di Torino21E-mail: elena.fregonara@polito.it, 22diana.rolando@polito.it, 23patrizia.semeraro@polito.it, 24martavella@gmail.com25Key words: Sustainable Real Estate, 26Energy Efficient Buildings, Energy 27Performance Certificate (EPC), 28Hedonic Model29Parole chiave: Sostenibilità e mercato 30immobiliare, Classi di prestazione 31energetica, Determinanti prezzi di 32offerta33JEL: C31, R30, R3134The impact of Energy Performance 35Certificate level on house listing 36prices. First evidence from Italian 37real estate38The recent dispositions related to the energy performance 39of buildings, launched by the European Directives 2002/91/40EC and 2010/31/EU, turned attention to the Energy Perfor-41mance Certificate (EPC).42The aim of this study is to investigate the economic effects 43of the recent Italian statutory provisions related to energy 44performance of buildings on listing behaviour. With this 45aim an hedonic regression analysis is performed, in order to 46measure the impact of EPC level on listing prices. The study, 47based on a set of more than 500 housing property asset col-48lected in 2012 from real estate advertisements websites, is 49focused on the Turin real estate market as a case study. Fur-50thermore this paper contributes to the early limited literature 51on implication of the impact of EPC level on Italian housing 52market, representing one of the first systematic evidence 53about the energy certifications in the housing listing prices. 541. Introduction55The impact of energy performance of buildings on house prices is related to re-56cent European Directives. Particularly, the European Performance of Buildings Di-57rective 2002/91/EC introduced the Energy Performance Certificate (EPC), to measure 58energy performance of buildings. According to Article 7 of the Directive 2002/91/59EC “Member States shall ensure that, when buildings are constructed, sold or rent-60ed out, an energy performance certificate is made available to the owner or by the 61owner to the prospective buyer or tenant, as the case might be. The validity of the 62certificate shall not exceed 10 years”. Furthermore, in order to reinforce the European 63regulation in housing market, the European Directive 2010/31/EU (EPBD Recast) re-64quires mandatory energy performance certificate for all buildings within the Euro-65pean Union. The Article 12 defines that “Members States shall require [...] the energy 66performance indicator of the energy performance certificate of the building or the 67building unit, as applicable, is stated in the advertisements in commercial media.”68According to the Directives 2002/91/EC and 2010/31/EU “the energy perfor-69mance of buildings should be calculated on the basis of a methodology, which 70may be differentiated at national and regional level, that includes, in addition to 71thermal characteristics, other factors that play an increasingly important role such 72as heating and air-conditioning installations, application of energy from renew-73able sources, passive heating and cooling elements, shading, indoor air-quality, ad-74equate natural light and design of the building […]”.757677===== PAGE 12 (score 32, numeric-paren 3, table-words 13, var-words 3) =====7879154 80E. Fregonara, D. Rolando, P. Semeraro, M. Vella81all the characteristics considered have a significant impact on listing price, in that 82they are considered by agents important factors in selling a house. Also notice that 83the omitted Microzone is a central one, explaining the fact that most of the coef-84ficients are negative.85Since the EPC is not associated with quality of the building, apartment condi-86tion and Microzone, we perform the regression including the EPC level, to meas-87ure the contribution of EPC to explain the model price variability. Table 7 provide 88the results of the regression performed including EPC level in the set of explana-89tory variables. The explanatory power of the model is Adjusted R2=0.76, showing 90that to include the EPC levels does not improve the fit of the model (the Adjusted 91R2 increase is only 0.01). Furthermore, if we consider each EPC level coefficient 92we notice that only level F is significant. By considering that level G is not reliable 93since it includes property whose level has not been assigned the level F is the low-94Table 4. Chi-square test results.95EPC level96Location (Microzone)97X-squared = 10.30, df = 5, p-value = 0.0798Buildings quality99X-squared = 4.17, df = 5, p-value = 0.53100Apartment condition 101X-squared = 2.52, df = 5, p-value = 0.77102Source: authors’ own work.103Table 5. The explanatory power of the EPC level.104Residuals: 105 Min 1Q Median 3Q Max 106-0.946274 -0.300495 -0.003115 0.291018 1.229920 107 108Estimate Std. Error109t value110Pr(>|t|)111 112(Intercept)11380.411140.8011570.22116< 2e-16117***118B119Omitted120C121-0.121220.89123-0.981240.33125 126D127-0.201280.85129-1.601300.10131 132E133-0.271340.86135-2.171360.03137*138F139-0.401400.87141-3.231420.00143**144G145-0.271460.82147-2.321480.02149*150Signif. codes: 0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1 151Residual standard error: 0.41 on 497 degrees of freedom 152Multiple R-squared: 0.04, Adjusted R-squared: 0.03 153F-statistic: 4.16 on 5 and 497 DF, p-value: 0.00154Source: authors’ own work.155156157===== PAGE 13 (score 9, numeric-paren 5, table-words 1, var-words 2) =====158159The impact of Energy Performance Certificate level on house listing prices 160155161Table 6. Hedonic regression results (Model 1, excluding the EPC level in the set of explanatory 162variables).163Residuals164Min1651Q166Median1673Q 168Max169-0.84666170-0.119111710.006761720.129331730.53547174 175Estimate176Std. Error177t value178Pr(>|t|)179 180(Intercept)181785.081820.06183133.75184< 2e-16185***186Microzone 11870.191880.121891.661900.1191.192Microzone 2193Omitted194Microzone 31950.131960.081971.551980.12199 200Microzone 42010.072020.082030.582040.4205 206Microzone 5207-0.022080.07209-0.222100.82211 212Microzone 62130.262140.112152.322160.02217*218Microzone 7219-0.142200.06221-2.222220.03223*224Microzone 82250.012260.082270.112280.87229 230Microzone 9231-0.112320.08233-1.382340.17235 236Microzone 10237-0.222380.08239-2.872400241**242Microzone 11243-0.322440.07245-4.922461.17E-06247***248Microzone 12249-0.122500.07251-1.652520.1253.254Microzone 142550.042560.072570.422580.55259 260Microzone 15261-0.082620.07263-1.132640.26265 266Microzone 162670.42680.122693.452700271***272Microzone 17273-0.12740.1275-1.062760.29277 278Microzone 18279-0.272800.08281-2.732820283**284Microzone 19285-0.452860.07287-6.472882.18E-10289***290Microzone 20291-0.512920.07293-7.082944.54E-12295***296Microzone 21297-0.82980.06299-13.37300< 2e-16301***302Microzone 22303-0.193040.08305-2.433060.01307*308Microzone 233090.153100.073112.133120.03313*314Microzone 24315-0.063160.06317-1.043180.3319 320Microzone 25321-0.173220.09323-1.993240.05325*326Microzone 26327-0.453280.07329-6.743304.25E-11331***332Microzone 27333-0.413340.08335-4.873361.44E-06337***338Microzone 28339-0.543400.08341-6.643428.01E-11343***344Microzone 29345-0.363460.06347-6.383483.78E-10349***350Microzone 30351-0.493520.07353-6.663546.82E-11355***356