Stabilization in Property Values Thanks to Energy Efficiency Upgrades: A Positive Shift in the Real Estate Market

Despite a decline in value for properties with poor energy performance, such as your parents’ house or an uninsulated apartment, a new study by real estate experts shows that this trend has stopped. However, older, unrenovated houses are still seeing a decrease in value almost equivalent to the costs of energy-saving renovations.

The stabilization in prices is mainly due to the fact that construction costs have stabilized and even declined in some trades. The costs of financing have also stabilized after a rise in interest rates. In the first quarter of the year, there was an average price difference of 25.1 percent between apartment buildings with top energy efficiency ratings (A/A+) and the worst ratings (G/H), compared to 26.9 percent at the end of last year.

With rising prices for electricity and gas, energy efficiency is becoming increasingly important in property purchasing decisions. The new law on heating replacement by the federal government has also caused uncertainty in the market. Owners of single- and two-family homes have to reduce prices significantly more when selling, as buyers would have to bear higher energy costs if they choose to live in the property themselves.

Selling unrenovated properties remains difficult, especially in rural areas where buyers may struggle to offset the costs of expensive energy-saving renovations with lower rental income. The gap between old and new properties is expected to widen, according to expert Sören Gröbel.

Despite these challenges, the slight improvement in property values is encouraging. It is clear that energy efficiency is becoming a key factor in property valuation and purchasing decisions, signaling a positive shift in the real estate market as it becomes increasingly aware of its impact on property value and decision making process for home buyers and sellers alike .