Building energy performance and housing market regimes: evidence from EU countries

Abstract In assessing developments in the real estate market, the energy efficiency of buildings is increasingly considered important from an environmental and economic perspectives. However, empirical evidence on the relationship between energy performance indicators and house price dynamics at the macro level remains mixed, suggesting that this relationship may vary across countries and contexts. This article examines whether and how building energy performance indicators are related to house price dynamics across European Union countries, focusing on short- and long-term relationships and cross-country heterogeneity. The study is based on panel data for 2010-2023, using house price indices as the dependent variable and several energy efficiency indicators, including final energy consumption in buildings and the share of renewable energy sources. Various econometric methods were applied, including panel cointegration analysis (FMOLS and DOLS), dynamic panel models (Arellano-Bond GMM), Granger causality tests, impulse-response analysis, quantile regression, threshold models, and exploratory country clustering. The results show that energy efficiency indicators are not strongly associated with house prices at the aggregate EU level, and their short-term effects are generally weak. Instead, the findings reveal significant heterogeneity across countries and income regimes, suggesting that the capitalisation of energy efficiency in house prices is highly context-dependent. By combining econometric analysis with exploratory segmentation approaches, the study helps structure heterogeneous energy housing interactions into distinct market environments relevant for investment and policy analysis. These results highlight the limitations of uniform macro-level approaches and underline the importance of differentiated market analysis.