23.04.2023
A new bill passed by the European Parliament aimed at combating climate change by reducing carbon emissions could have serious implications for Cyprus property markets. Older buildings (over 30 years old) require significant upgrades to meet new energy efficiency standards , and this is expected to have a huge impact on local real estate markets. This could result in higher costs for homeowners and landlords, as well as for buyers and renters looking for more energy efficient properties.
The cost of refurbishing a building to meet new energy efficiency standards can be high, ranging from a few thousand euros to tens of thousands, depending on the size of the facility and the degree of refurbishment required. For example, in Cyprus, the cost of refurbishing a building to meet the new energy efficiency standards can range from €7,500 to €30,000 depending on the size of the property. In addition, the new rules could lead to lower real estate values for buildings that do not meet the new energy efficiency standards .
In addition, the new rules may affect the demand for older buildings that are not energy efficient . This could have a significant impact on local real estate markets as many of these older buildings are located in popular tourist destinations and make up a large part of the economy.
The new rules could also have implications for the construction industry in Cyprus and Greece. With the introduction of new regulations, construction companies will need to focus on building more energy efficient buildings, which could lead to higher costs. This could lead to a downturn in the sector if builders are unwilling to invest in more expensive projects.
On the other hand, the new rules create opportunities for various stakeholders in the real estate market. Property owners and landlords can take advantage of financial incentives to invest in energy efficient upgrades and renovations to their property.
Banks and financial institutions can create financing options and products that support these investments (sustainable financing), such as green mortgages or loans offering reduced interest rates for energy efficient properties. Developers and construction companies can incorporate sustainable building practices into their designs, giving them a comparative advantage as demand for such buildings grows. In addition, real estate agents can educate their clients about the benefits of energy efficient properties and guide them towards sustainable housing choices.
By taking advantage of these opportunities, stakeholders will not only comply with the new rules, but will strengthen their reputation and brand value, increase their property value, and contribute to a more sustainable future.
Ask Wire can help sector stakeholders in three ways.
First, by mapping the location of these properties according to their age. This will facilitate targeted financing and marketing initiatives from financial institutions, energy providers and those offering energy efficiency related services .
Second, in collaboration with the Cyprus University of Technology, the company has developed an innovative model that evaluates the energy efficiency of residential buildings using some intuitive data. The model can be used for mass property valuation, allowing banks to evaluate the energy efficiency of their collaterals and use it to generate leads for new green loans.
Third, by the end of the year Ask Wire will launch its own ESG scoring system that will enable property owners to manage their buildings to international standards, improving their performance, helping the environment and adding value to their tenants and their portfolio.
