The Investment Value of Green Buildings in Japan

Abstract

This paper aims to extend the existing evidence on the investment value of green buildings to international markets, specifically the residential real estate market in Japan. Using a unique transaction database of condominiums in the Tokyo metropolitan area and a hedonic analytical framework, we find that green buildings command a small but significant premium on both asking and transaction prices. The magnitude of this premium is found to fluctuate depending on market conditions. This finding is consistent with findings from other countries. As far as we are aware, this is also the first hedonic study of green value that incorporates detailed buyer characteristics.