Building value: Hedonic pricing analysis of energy performance ratings and house prices in Dublin, Ireland

Building energy performance is a key metric in the context of decarbonising the built environment sector. Improving the energy efficiency and energy performance of homes will entail major investment decisions for governments, housing bodies and individuals. Investigating the relationship between house prices and Energy Performance Certificate ratings can inform the decision-making process for those energy efficiency investments, as well as the design and evaluation of home retrofit programmes and supports. Utilising a hedonic pricing methodology, this paper examines the influence energy efficiency attributes have on property list prices in Dublin, Ireland. The analysis is applied to a data set of over 11,000 properties in which property list prices from 2019–2022 are linked to factors pertaining to the quality and location of the property as well as the Irish BER system. The model assesses the monetary value of an uplift in BER, while controlling for factors relating to the home’s size, quality and location as well as the time of sale. Results indicate that a 10% improvement in BER performance is associated with a 0.6% increase in list price. While our results do not establish a causal relationship, these findings demonstrate a price premium of 2.6% for A and B rated homes as compared to D rated homes. In the context of an average 3-bed semi-detached home in Dublin, this translates to €12,200 of added capital value with potential relevance for individual investment decisions and policy support strategies.