The German real estate market is facing a phase of profound transformation. Rising CO₂ costs and depreciation of energy-inefficient buildings make the transformation of the building sector an economic necessity. Energy low performers are increasingly losing market value and causing higher operating costs. This is because the EU Energy Performance of Buildings Directive 2024 (EPBD 2024), the national pricing of CO₂ and the imminent introduction of the EU emissions trading system ETS 2 will turn energy sustainability from a voluntary option into a binding market standard for the building sector. Against this background, the global real estate service provider CBRE has analysed the current energy condition of the housing stock in Germany on the basis of a representative sample covering 2.1 million residential units. CBRE's report is available at this link.
"In addition to the legal obligations for restructuring, there are also economic aspects that further accelerate the implementation of the measures," says Dr. Thorsten Huff, Senior Director and Lead for ESG and Sustainability Solutions at CBRE. "Inefficient inventories are steadily losing value and causing significantly higher operating costs. At the same time, rent surcharges for efficient apartments and significant purchase price reductions for energy-efficient low performers are sending clear financial signals. This distinction between 'Green Premium' in rents and 'Brown Discount' in purchase prices also makes energy-efficient renovations an economic imperative."
The Buildings Directive EPBD 2024 is intended to make real estate significantly more energy-efficient. To this end, buildings are divided into eight energy efficiency classes (A to H). The directive prescribes a reduction in the national average consumption of residential buildings by 16 percent by 2030 and by 20 to 22 percent by 2035. 55 percent of these savings must be achieved by renovating the buildings with the worst energy efficiency.
The analysis of 2.1 million housing offers shows that most existing buildings have an average primary energy consumption of 124 kWh/m² p.a. and thus belong to class D. At the same time, there are major regional differences. For example, housing stocks in the east and south of Germany have an average share of buildings in energy class E of less than 30 percent. In the north and west, this proportion is sometimes over 50 percent. These regional differences result from the interplay of several factors, such as divergences in connection to the district heating network or differently implemented modernisation programmes.
In cities, the building stock is more modern, more densely built, and better connected to efficient heating systems such as district heating. This leads to lower consumption and enables energy improvements, especially in the medium efficiency classes. In rural areas, on the other hand, older detached and semi-detached houses from the weakest energy construction periods dominate. "The greatest potential is currently in classes D, E and F. In the medium term, classes G and H will disappear, especially in metropolises, also because landlords will have to bear a large part of the CO₂ costs themselves in the future. The rehabilitation of these portfolios would have the greatest effect on overall efficiency in Germany," says Huff.
