Impact of Energy Rating on House Prices and Lending Rates

Gabor Hajnal (), Alexandr Maxim Palicz () and Sandor Winkler ()
Additional contact information
Gabor Hajnal: Magyar Nemzeti Bank
Alexandr Maxim Palicz: Magyar Nemzeti Bank
Sandor Winkler: Magyar Nemzeti Bank

Financial and Economic Review, 2022, vol. 21, issue 4, 29-56

Abstract: 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.

Keywords: green financing; new homes; energy rating; housing loans (search for similar items in EconPapers)
JEL-codes: C13 G21 R30 (search for similar items in EconPapers)
Date: 2022
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://en-hitelintezetiszemle.mnb.hu/letoltes/fer ... l-palicz-winkler.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mnb:finrev:v:21:y:2022:i:4:p:29-56

Access Statistics for this article

More articles in Financial and Economic Review from Magyar Nemzeti Bank (Central Bank of Hungary) Contact information at EDIRC.
Bibliographic data for series maintained by Morvay Endre ( this e-mail address is bad, please contact ).