The Effects of Energy Efficiency Renovation of Residential Buildings on the Housing Market: A Study from Lithuania

Egle Jakucionyte () and Swapnil Singh ()
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Egle Jakucionyte: Bank of Lithuania
Swapnil Singh: Bank of Lithuania

No 135, Bank of Lithuania Working Paper Series from Bank of Lithuania

Abstract: This study examines the impact of large-scale energy efficiency renovations on apartment prices in Lithuania by combining administrative data on transactions with information on renovation projects. We find that the increase in apartment prices typically falls short of covering renovation costs, with the estimated gap reaching approximately 25%. This gap – the net price effect – is particularly pronounced outside the three largest municipalities, largely due to regional differences in apartment price levels rather than renovation costs. We propose a search-andmatching housing market model to explain these patterns. In this model, higher market thickness increases the net price effect, and may also help explain the lower renovation activity observed in thicker markets.

Keywords: Energy efficiency renovation; residential real estate; regional variation in property values; repeated-sales model (search for similar items in EconPapers)
JEL-codes: Q56 R31 R32 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2025-09-05
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