Energy Prices Are Expensive, European Residents Choose Energy-Efficient Home Renovations

Illustration of a solar panel on a house roof. Expensive energy prices have prompted Europeans to renovate their homes to be more energy efficient. Photo illustration: Pexels.

JAKARTA - Expensive energy prices are changing the European property market. New home construction is slowing, but energy-efficient renovations are on the rise.

Anadolu Agency, quoted Wednesday, August 5, reported that the European Central Bank or ECB said the surge in energy costs was prompting households to invest in energy-efficient renovations.

Energy efficiency means using energy more sparingly without reducing the main function of the building. In the home, the form can be in the form of heating, insulation, window repairs, or devices that make energy consumption lower.

According to the ECB blog published Wednesday, the new investment helped mitigate the impact of energy price shocks on the building and construction sector.

The blog was written by Senior Economist Marco Weissler and Economist Desislava Rusinova. Both of them assessed that renovation spending made the building sector not too affected by the surge in energy prices.

The soaring energy prices put a huge pressure on the property industry. Construction and maintenance costs for buildings are rising.

At the same time, home ownership loans or mortgages are increasingly difficult to obtain as interest rates rise.

A mortgage is a loan to buy a house or property with the security of the purchased asset.

This condition makes new construction slow down. However, some households see this situation as a time to rearrange the house, renovate, and invest in energy savings.

The decline in equipment prices and government subsidies also support the wave of renovations.

The ECB explained that additional renovation spending helped to contain the negative impact of rising energy prices on residential investment in the short term.

In the long term, energy-efficient renovations also reduce the building sector's dependence on fossil fuels.

This change makes the building sector more resistant to energy price shocks and confidence declines triggered by high energy costs.