The energy usage of a home is often an important factor for people when considering renting or buying. Using an energy performance rating is one way to show how “energy hungry” a home could be. In some countries, it is mandatory for the seller to obtain, and disclose, a home’s energy rating. For countries in the European Union, this has been the case for 10 years. In the ACT a disclosure scheme has been operating for 20 years. Disclosing energy ratings is common practice in the commercial building sector in Australia, where it has been found to have a positive effect on the value of buildings with higher energy ratings (a price premium). Researchers are now looking to see if a similar effect exists in the residential sector.

If a rating scheme can influence residential property values, it is important to understand how consistent the effect is, and what else policy makers need to consider in developing and justifying such a scheme. The main objective of the review was to explore the relevant body of academic literature to answer the question: What are the effects of residential building energy performance disclosure policies on property values?

Key findings

• The majority of the 27 relevant international primary academic publications reviewed for this project agree that a price premium does exist for more energy efficient homes, typically in the order of 5% to 10%.
• There are two ways at looking at potential price effects. In both cases, a price premium was found.
• The reported price premium varied by study, country, and real estate market. One study, in Belfast, found a 27% price premium for high rated buildings, while another in the Netherlands, found a price premium of 2.7% for similarly rated dwellings.
• Only four studies, out of the 27, found that lower building energy ratings were associated with higher property prices.
• The observed price effects were not just related to the energy efficiency of the building, but also to a range of local factors, such as housing supply and demand, and how much prospective buyers were willing to pay for energy efficient homes. 

Conclusion
The review suggests that home buyers typically value a more energy efficient home, and when presented with easily accessible information in the form of an energy performance rating, are willing to pay more to live in one. Therefore, a disclosure policy of a building’s energy rating can assist consumers in making a more energy efficient choice, which may result in lower energy bills and a healthier home. Homeowners, agents and policy makers should consider the way that the rating scheme is calculated, the local context, and the associated evaluation model.