Impact of Energy Rating on House Prices and Lending Rates

Hajnal, Gábor and Palicz, Alexandr and Winkler, Sándor (2022) Impact of Energy Rating on House Prices and Lending Rates. FINANCIAL AND ECONOMIC REVIEW, 21 (4). pp. 29-56. ISSN 2415-9271


Download (888kB) | Preview


The real estate market is a key component of the green transition, and thus it is worth examining the pricing and financing costs of modern residential buildings in Hungary. In our study, we investigate a) whether a significant price premium can be identified for green properties based on new housing projects in Budapest, and b) whether banks finance residential buildings with more advanced energy technologies at lower interest rates. Based on our regression estimation, the green price premium is clearly evident in the Budapest new housing market: on average, homes with an energy rating of BB or better are 5.1 per cent more expensive than homes with an energy rating of CC. Based on our estimate of housing loan interest rates, no significant difference can be identified in the interest rates on loans granted to finance properties with a certificate higher than CC compared to loans granted for properties with CC certificate, i.e. banks do not yet factor energy aspects into the pricing of loans.

Item Type: Article
Uncontrolled Keywords: green financing, new homes, energy rating, housing loans
Subjects: G Geography. Anthropology. Recreation / földrajz, antropológia, kikapcsolódás > GE Environmental Sciences / környezettudomány
H Social Sciences / társadalomtudományok > HG Finance / pénzügy > HG3 Credit bank / hitelügy
Depositing User: MTMT SWORD
Date Deposited: 09 Jan 2023 08:02
Last Modified: 27 Apr 2023 11:37

Actions (login required)

Edit Item Edit Item