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Investing in sustainability increasingly pays off

A home with an energy label C is worth 7.9% more on average than a comparable home with a G label. This is apparent from research by Brainbay, the data agency of NVM, which investigated the relationship between energy label, home value and marketability.

The main findings in brief:

• The more sustainable the home, the higher the home value. A house with label C yields an average of 7.9% more than a comparable house with a G label. With the current average house price, this quickly amounts to more than € 30,000.
• In a wider housing market, the added value of a sustainable home is higher than in a tighter one.
• Added value of a sustainable home has increased considerably since the rise in energy costs and a less tight housing market at the end of 2021.
• Attention to sustainability has increased sharply among both seller and buyer.

Label distribution for sale in 2022 mirrors the housing stock
It is striking that the housing stock has an average higher label compared to 2015, and that 25% of the sold objects now have an A label. If the sales of 2022 are compared to the label distribution in the current owner-occupied housing stock, the graph on the far right, then the sales appear to be a good reflection of the entire stock.

Figure 1: Distribution of energy labels by sales (2015 and 2022) and by current owner-occupied housing stock. Source: NVM/brainbay, Ministry of Housing & Spatial Planning

Every step in label jump leads to a higher home value
This is shown in figure 2. A house with label C therefore yields on average 7.9% more than a comparable house with a G label. With the current average house price, this quickly amounts to more than 30,000 euros. An investment in sustainability is therefore an investment in the value of a home. These indirect benefits come on top of the savings in energy costs. In addition, a better energy label offers an increasing number of mortgage lenders an interest discount, resulting in lower monthly payments.

Figure 2: % increase in home value for all homes in the Netherlands. An average of 7.9% more is paid for a house with label C than for a comparable house with label G. Source: brainbay

Sustainability is becoming increasingly important when selling a home
The measured increase in “green added value” of sustainable homes coincides well with the increased interest from buyers. In a survey on sustainability among NVM brokers, it appears that in the past three years substantially more potential buyers have asked about possible sustainability measures, their costs, and about specific measures such as solar panels and insulation.

Source: Brainbay