The Relevance of EPC Labels in the Spanish Residential Market: The Perspective of Real Estate Agents

Carlos Marmolejo-Duarte,Consuelo Del Moral-Ávila,Silvia Spairani Berrio,Luís Delgado Méndez

doi:10.3390/buildings10020027

Abstract

Assessment regarding the impact of Energy Performance Certificates (EPC) on the residential market is largely inconclusive; while the majority of hedonic analyses have found EPC ratings to be correlated with prices, opinion-based research has found a negligible impact on prices and other marketing variables. Using the opinion of qualified real estate agents, this paper explores whether, in Spain, EPC labels play any role in housing marketing, as well as the policy changes required to foster efficient dwellings. The results reveal a large misunderstanding of the EPC labels, since they are seen as a global home-quality indicator, while their impact on residential marketing is quite poor. Apparently, both supply and demand place a small interest in energy performance, although it is slightly larger for sellers/buyers in relation to lenders/tenants. In any case, EPC labels are far from blurring the energy information asymmetry, since most of the buyers/tenants are informed of the EPC rating after having selected their home. Overall, the EPC scheme has a poor reputation exacerbated by inaccuracies, unintelligible units to express the financial and environmental implications of energy efficiency, and an apparent weak supervision. These findings stress the need to improve the scheme; in doing so, realtors suggest the need for some companion policies.

Highlights

A number of barriers limiting the adoption of energy-efficient premises under the social optimal (i.e., “energy gap”) have been identified [1]
Using surveys gathered from qualified real estate agents, this paper addresses this knowledge gap with the following aims: (i) identify the awareness level of Energy Performance Certificates (EPC) ratings and their perceived role; (ii) explore whether EPC ratings play any role in price formation and other marketing aspects, both in the selling and leasing markets; (iii) identify the main issues around the Spanish implementation of the EPC scheme; and (iv) ascertain the companion policies that, according to realtors, may help to foster the development and retrofit of efficient homes
There is a misperception regarding the role of EPC ratings, since most realtors agreed that such labels were about the general quality of the homes and thermal comfort

Summary

Introduction

A number of barriers limiting the adoption of energy-efficient premises under the social optimal (i.e., “energy gap”) have been identified [1]. One such barrier is information asymmetry between future users and suppliers, which constraints the capacity of the former to take into consideration the potential benefits of energy-efficient technologies. EPC labels are intended to explain in an easy way (e.g., ratings) the financial and environmental implications of the energy performance of buildings certified by independent experts.

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Conclusion