Template-Type: ReDIF-Article 1.0

Author-Name: Gabor Hajnal
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: hajnalg@mnb.hu

Author-Name: Alexandr Maxim Palicz
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: palicza@mnb.hu

Author-Name: Sandor Winkler
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: winklers@mnb.hu


Title: Impact of Energy Rating on House Prices and Lending Rates

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.

Classification-JEL: C13, G21, R30
Keywords: green financing, new homes, energy rating, housing loans
Pages: 29-56
Volume: 21
Issue: 4
Year: 2022
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-21-4-st1-hajnal-palicz-winkler.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:21:y:2022:i:4:p:29-56