The EUEnergy Directive and Real Estate Appraisal The
- Slides: 25
The EU-Energy Directive and Real Estate Appraisal: The Case of Austria Johann Sebastian Kann, Philipp Kaufmann, Gunther Maier
Overview § § § European Energy Performance of Buildings Directive Implementation in Austria („Energieausweis“ [EA]) First results and issues Energy Directive and real estate appraisal Summary and conclusions SEITE 2 FUßZEILE
EU Energy Directive § Adopted Dec. 16 th, 2002, entered into force Jan 4 th, 2003 § Aims: § protection of climate and reliable information § reduction of energy use in buildings (minus 20% through cost efficient measures) § improving the total energy efficiency of buildings § market transparancy § energy a factor in real estate appraisal
EU Energy Directive § Content § determines method of calculation (based on structural analysis and building services) for existing and new buildings § minimum requirements for large renovations § inspections of heating and cooling systems at regular intervals § certification of energy efficiency
EU Energy Directive § Requirements to be implemented by member states by Jan 4 th, 2006 energy performance certificate (article 7) made available at construction, sale or renting validity of max. 10 years accompanied by recommendations for the cost-effective improvement of the energy performance § „placed in a prominent place clearly visible to the public“ in buildings with more than 1000 sqm occupied by public authorities § § §
Implementation in Austria § Energy performance certificate = Energieausweis § Federal structure implementation at different levels § Federal level: Energieausweis-Vorlage-Gesetz (2006, in effect Jan 1 st, 2008, sale and change of use) § Technical standards (methods of computation, minimum requirements, design of document) § 9 federal states: building codes (construction, renovation)
Example: Residential Buildings 10 k. Wh/m 2 a 15 k. Wh/m 2 a 25 k. Wh/m 2 a 50 k. Wh/m 2 a 100 k. Wh/m 2 a 150 k. Wh/m 2 a 200 k. Wh/m 2 a 250 k. Wh/m 2 a > 250 k. Wh/m 2 a
Example: Non-residential buildings 10 k. Wh/m 2 a 15 k. Wh/m 2 a 25 k. Wh/m 2 a 50 k. Wh/m 2 a 100 k. Wh/m 2 a 150 k. Wh/m 2 a 200 k. Wh/m 2 a 250 k. Wh/m 2 a > 250 k. Wh/m 2 a SEITE 8 FUßZEILE
Implementation in Austria § Issued for the building § Different zones of use (living, office, restaurant) § Theoretical value with respect to a reference climate and a target temperature (20°C) § Computed from shape and structure of the building, materials, level of maintainance, etc. § NOT based on actual energy use (as in Germany and other countries) § In transactions the EA has to be made available § No penalty § In case of non-compliance: Energy efficiency corresponding to age and type of building assumed SEITE 9 FUßZEILE
Implementation in Austria § Necessary information: § Detailed maps of the building and its parts § Information about the structure (materials, walls, insulation of walls, top and bottom floor) § Information about the quality of windows and outside doors (have they been renewed) § Information about heating system (structure of installation, type of heating) § Information about water heating system (type of boiler) § Information about ventilation and air conditioning systems (non-res. buildings) § Information about lighting system (non-res. buildings)
First results and issues § Missing penalty – selective incentive for noncompliance § Avoid the costs § Owners of buildings below average standards have no interest to make this transparent § One size fits all instrument § Value for the building does not necessarily reflect the results for individual appartments
HWB = 68 k. Wh/m 2 a
HWB = 68 k. Wh/m 2 a 94 k. Wh/m 2 a +38. 24%
HWB = 68 k. Wh/m 2 a 142 k. Wh/m 2 a +108. 82%
HWB = 68 k. Wh/m 2 a 41 k. Wh/m 2 a -39. 71%
First results and issues § Quality of the available documents § § § Depends on the age of the building Improvements often not adequately documented Does the documentation reflect the current standard? Can the qualities be investigated without damage? Technical specifications are typically missing § Important locations in the buildings are often not accessible § Heating centres, technical installations § Individual appartments
First results and issues § Interesting legal issue: liabilities § Issuer of EA: wrong value and category; appartment vs. building § Owner for not initiating and buying an EA (use of default) § Appraiser § How to take result of the EA into account in an appraisal § How to deal with non-availability of EA? § Can the appraiser accept the non-availability of an EA? § All these issues will have to be resolved by court cases in the future
First results and issues § Can the EA lead to (requests for) changes in price or rent? § Higher energy demand than calculated § Appartment vs. building § Deviation from the implicit standards of Austrian rent regulations § Interesting case of asymmetry § Requests for reduction seem more likely than requests for increases
First results and issues § Impression from the industry § Not all owners comply with the regulation § Reluctance in acceptance § Appraisers rarely use the EA as a source of information in their appraisals § Uncertainty in the industry § EA and sustainability § The EA does not identify reasons for energy waste § The EA does not provide any guidance for improvements § Incentive structure
Energy directive and real estate appraisal § In theory, energy efficiency influences value and should therefore be a topic in appraisals. § The EA provides standardized information that should be taken into account in appraisals. § Is this the case? § Empirical investigation of real estate appraisals that are provided for order/edict court cases (available at http: //www. edikte. justiz. gv. at/)
Energy directive and real estate appraisal § Results § Only 12% / 22% mention „Energie“ § Most of them (49%, 69%) for stating „EA not available“ § No case where EA was available, in 1 case (June) it was a by product of the appraisal § Only 1 / 7 cases where energy was taken into account in the valuation January June appraisals 361 326 "Energie" mentioned 45 72 "EA not available" 22 50 INFO-A 12 8 INFO-T 6 1 Evaluation 1 7 EA generated 0 1
Energy directive and real estate appraisal § Results § Energy efficiency is rarely an issue in appraisals; most appraisals don‘t even use the term „energy“. § Increase between January and June 2009 is solely attributable to „EA not available“ § Appraisers became more aware that they need to mention the non-availability of an EA (risk of liability) § In no one case an EA was mentioned as being available for the appraisal.
Summary and conclusions § EU energy directive: § ambituous initiative to save energy and improve the transparency of the market § Leaves (necessary) room for variations between countries § Austrian implementation: § § Based on building characteristics Lacks penalty for non-compliance Difficult information requirements Problematic incentives and design characteristics SEITE 23 FUßZEILE
Summary and conclusions § Although the EA is an issue for real estate appraisal § EA not used in appraisal § „Non-availability“ mentioned in few cases (not yet standard) § Energy efficiency is not a topic in insolvency related real estate appraisal in Austria SEITE 24 FUßZEILE
Thank you for your attention FORSCHUNGSINSTITUT FÜR RAUM- UND IMMOBILIENWIRTSCHAFT RESEARCH INSTITUTE FOR SPATIAL AND REAL ESTATE ECONOMICS Augasse 2 -6, 1090 Vienna, Austria a. o. UNIV. PROF. DR. GUNTHER MAIER T +43 -1 -313 36 -4780 F +43 -1 -313 36 -705 gunther. maier@wu. ac. at www. wu. ac. at
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