Last year's big debate in Germany surrounding the Heating Act and the resulting uncertainty has already had a strong impact on residential property valuations, according to property portal ImmobilienScout24.
A recent survey by the portal, Germany's biggest, shows that asking prices for refurbished properties (energy efficiency classes A and B) have largely held their value, or have actually risen slightly, against a background of overall falling prices across the country. Properties with lower energy efficiency ratings are continuing to see price falls.
Average asking prices for properties in energy efficiency classes A and B rose by 2.2% or €106 year-on-year to €4,958 per sqm in the fourth quarter of 2023. In the same period, prices for properties in classes C and D fell by an average of €335 per sqm. In classes E to H, asking prices have fallen by €292 year-on-year. This means that properties in energy efficiency classes C and lower have seen an average price drop of around 7%.
The proportion of properties in need of refurbishment remains high. In Q4 of 2023, 42% of the properties on the ImmoScout24 platform had an energy efficiency rating of E to H. In contrast, 21% of properties with an A or B rating met a good to very good energy standard. In Q2 of 2023, the figure was slightly lower at 20%. The average energy efficiency classes C and D account for 37% of the properties on offer. Here, too, there was a slight increase of 1 percentage point.
According to Dr. Gesa Crockford, managing director at ImmoScout24, "A large proportion of properties in Germany are in need of renovation, as 42% are in energy efficiency class E or worse." This means the need for refurbishment remains high and is all the greater the older the property.
The number of energy-efficient refurbished properties on ImmoScout24 peaked In the first quarter of 2019,. In the second quarter of 2023, however, the proportion had already fallen by 21%. In the fourth quarter, the figure was down a full 33% on the 2019 volume.
The EU is on a drive to promote building refurbishment for greater energy efficiency and climate protection, but has decided against making refurbishment mandatory for residential buildings. In mid-March, the EU Parliament approved the Building Efficiency Directive, which the Parliament, Commission and member states had already agreed upon in December.
According to the directive, the 27 EU member states must apply the new standards to non-residential buildings such as offices or hospitals and can use EU funds to make them more energy efficient. However, the member states still have to give their approval at an EU Council meeting, probably in April. The two-year deadline for transposition into national law will then expire. Buildings account for around 40% per cent of energy consumption in the EU, with most of them being heated with fossil fuels such as oil and gas.
As for the surveying method of ImmoScout's analysis: the portal analysed all advertisements for houses and flats built up to 2013 that were advertised on the platform in the fourth quarter of 2023. For the evaluation of price trends, all listings for houses and flats in independent cities built up to 1990 that were advertised in the fourth quarter of 2022 and 2023 were analysed.
