This study analyzes the impact of energy-efficiency renovations on property values across 39
major German cities using a dataset of over 6,300 real estate listings. A log-linear ordinary least
squares (OLS) regression model was used to assess how energy demand, property
characteristics, and location affect price per square meter (SQM). The findings reveal that
energy-efficient homes generally sell at a premium, with variations across city categories (A,
B, and C) and property types. Munich and Münster were identified as the only cities where
energy-efficiency renovations provided positive returns on investment (ROI), while other cities
exhibited negative returns. Some property types, such as semi-detached houses and
farmhouses, showcased an increased negative response to higher energy demand, confirming
the hypothesis that different types of properties are impacted in varying ways. Practical
recommendations for investors include focusing on semi-detached and detached homes in Alocations, while paying careful attention to renovation costs, especially for older properties that
may require asbestos removal. Investors should also limit renovations goals to 60-70
kWh/SQM/y, as further improvements diminish returns. The study's limitations include the use
of approximations for renovation costs, which may not fully capture regional variations and
the exclusion of CO2 emissions from the analysis. These limitations could affect the
generalizability and accuracy of the findings.
