As Germany pushes for decarbonisation and electric heating becomes the norm, energy-inefficient homes are losing value. Oil and gas-powered properties, particularly older ones in need of refurbishment, are becoming less popular, widening the price gap with energy-efficient residences. Cities such as Mannheim plan to phase out gas networks by 2035, forcing owners to modify houses or risk losing their investments. Mark Carney has cautioned that obsolete homes may become "stranded assets." Tenants in older rental buildings face significant expenditures, whereas modern constructions prioritize efficiency. This trend emphasizes the growing relevance of sustainable homes in the German real estate industry.
Energy-inefficient homes in Germany are losing value as the shift towards decarbonisation accelerates and electric heating systems become the preferred standard. Properties heated with oil or gas, particularly those requiring significant renovations, are becoming less desirable compared to energy-efficient homes, widening the price gap between the two categories. According to Der Spiegel, Germany's push to reduce carbon emissions in housing is reshaping the real estate market, where location is no longer the sole determinant of a property's value.
Cities such as Mannheim are setting ambitious targets, with plans to phase out local gas networks by 2035. This trend puts pressure on property owners to either remodel older homes to meet modern energy standards or risk seeing their investments become "stranded assets." Mark Carney, United Nations Special Envoy for Climate Action and Finance, highlighted the hazards, noting that many fossil fuel-dependent houses may lose market value unless restored or repurposed.
Older rental homes, particularly those heated with gas, pose issues for renters who confront high energy expenses and inefficiency. These renters frequently have minimal capacity to influence renovations, making them exposed to escalating electricity costs. Retrofitting older homes is necessary to enhance energy efficiency, but it incurs large expenditures for property owners.
For newly constructed homes, the emphasis is on building energy-efficient properties from the outset. Jason Dion, Senior Research Director at the Canadian Climate Institute (CCI), stressed the importance of evaluating the long-term utility of new gas infrastructure. "We need to be thinking very carefully about whether [new gas infrastructure] is going to be used and useful over its lifetime," Dion remarked, cautioning against investments that may not align with future decarbonisation goals.
As the market evolves, homeowners with older, energy-inefficient properties face difficult decisions. Retrofitting is an option but comes with high upfront costs, while failing to upgrade risks reducing a property's value and marketability. For prospective buyers, energy efficiency is becoming a priority, not only for cost savings but also for future-proofing their investments in a rapidly changing regulatory environment.
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