According to meaningful data, in Spain, 81% of the housing stock bears the E, F, or Gram markings. It means that 4 out of 5 buildings are “bad” or “very bad” in terms of CO2 emissions in the country. And up to 84.5% of the housing stock are residential units with inefficient electricity consumption. All this has serious economic consequences.
One of the findings of Colliers and Balantia's report "Energy Efficiency and its Economic Impact on Housing" states: "Neglecting investment in energy efficiency of Spanish housing means wasting around 32 billion euros every year. Although these investments would pay off in less than 5 years".
But do not forget about the "Spain’s Recovery, Resilience and Transformation Plan" for real estate. 6.82 billion euros were allocated to restore the housing stock within this plan. The assistance and tax benefit package aims at the comprehensive improvement of the quality of real estate in the country in order to reduce huge misappropriations of funds due to buildings’ poor quality.
An Energy Efficiency Certificate (EEC) is a seal of quality that defines how eco-efficient a home or building is based on energy consumption and CO2 emissions. Upgrading the certification of a facility by two levels, for example, from D to B, will mean a 10% increase in the selling price of the building.
So, if we take Madrid and Barcelona as examples, it will mean that the average cost per square meter of premises will increase to 450 and 425 euros in these cities, respectively.
The report by Colliers and Balantia also shows that the minimum price growth in the southern and eastern parts of Madrid, and the suburbs of Barcelona, will be in the range of 100 to 300 euros per square meter.
The two-level growth in the degree of eco-efficiency will also affect real estate rental rates. The increase in rental prices will be between 9.5% and 11%. In the examples of Madrid and Barcelona, this will mean a price rise of monthly payments between 1.3 euros and 1.6 euros per square meter. The minimum increase will be from 0.5 euros to 1.3 euros per square metre in the south and east of Madrid and in the suburbs of Barcelona.
If we focus specifically on the return on investment (ROI) by increasing the rent, then the return on investment will exceed the level of 5.5%. The best coefficients will be received when moving from the E marking to the D and C markings, and from the D marking to the C marking. In these cases, the ROI can be between 15% to 35%.
Fernando Corvo, CCO of Balantia, says: “Investments in energy efficiency have always been recognized as an attractive way to reduce operating costs for tenants. But so far, it has been difficult to express in concrete figures the real value of these investments for the market while selling and renting a home.”