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The EU-Energy Directive and Real Estate Appraisal: The Case of Austria

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The EU-Energy Directive and Real Estate Appraisal: The Case of Austria Johann Sebastian Kann, Philipp Kaufmann, Gunther Maier * * * Overview European Energy ... – PowerPoint PPT presentation

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Title: The EU-Energy Directive and Real Estate Appraisal: The Case of Austria


1
The EU-Energy Directive and Real Estate
Appraisal The Case of Austria
  • Johann Sebastian Kann, Philipp Kaufmann, Gunther
    Maier

2
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

3
EU Energy Directive
  • Adopted Dec. 16th, 2002, entered into force Jan
    4th, 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

4
EU Energy Directive
  • Content
  • determines method of calculation (based on
    structural analysis and building services) for
    existing and new buildings
  • minimum requirements for new buildings
  • minimum requirements for large renovations
  • inspections of heating and cooling systems at
    regular intervals
  • certification of energy efficiency

5
EU Energy Directive
  • Requirements
  • to be implemented by member states by Jan 4th,
    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

6
Implementation in Austria
  • Energy performance certificate Energieausweis
  • Federal structure ? implementation at different
    levels
  • Federal level Energieausweis-Vorlage-Gesetz
    (2006, in effect Jan 1st, 2008, sale and change
    of use)
  • Technical standards (methods of computation,
    minimum requirements, design of document)
  • 9 federal states building codes (construction,
    renovation)

7
Example Residential Buildings
8
Example Non-residential buildings
9
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 (20C)
  • 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

10
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)

11
First results and issues
  • Missing penalty selective incentive for
    non-compliance
  • 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

12
HWB 68kWh/m2a
13
HWB 68kWh/m2a
94kWh/m2a 38.24
14
HWB 68kWh/m2a
142kWh/m2a 108.82
15
HWB 68kWh/m2a
41kWh/m2a -39.71
16
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

17
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

18
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

19
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

20
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/)

21
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
22
Energy directive and real estate appraisal
  • Results
  • Energy efficiency is rarely an issue in
    appraisals most appraisals dont 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.

23
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

24
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

25
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_at_wu.ac.at
  • www.wu.ac.at
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