Willingness to pay for green residential buildings in Malta : a consumer perspective

Abstract

As the Maltese islands’ urbanisation and level of redevelopment continues, transitioning from the current untenable construction approach towards adopting green building principles is crucial in establishing an adaptive, resilient and sustainable building stock. This dissertation aims at understanding whether, if given the chance, stakeholders, being real estate developers as well as end consumers are willing to pay a premium to invest or buy into a green building. It also gives insights into the key factors influencing their propensity to make these green investments and establishes the foundations for developing a green building policy framework. This information could be useful to policy makers and regulators in establishing which measures are ripe for implementation and which need to be discussed further or incentivised. This was accomplished by conducting a comprehensive questionnaire targeting the general public as well as semi-structured interviews with real estate developers. The quantitative data obtained from the questionnaires was analysed using descriptive statistics and tested for its statistical significance using the Chi-Square of Independence with Monte Carlo Fisher Freeman-Halton exact test. Conversely, the qualitative data obtained through the interviews was analysed in respect of their qualitative nature. These analytical techniques produced distinctive findings that serve as a basis to force a change in the way we currently build. The study focused on determining stakeholders’ willingness to pay for 18 primary green building features, mirroring the LEEDS and BREEAM frameworks. It transpires that the green building feature which consumers were willing to pay for the most was private outdoor space, with an average premium of more than 0.4% of the real estate value. The study demonstrated the demand for basic green building features including, double glazed apertures, thermal insulation, PV panels and energy-efficient fixtures, with stakeholders on average willing to invest premiums of between 0.25 - 0.4% of the real estate value for each of their incorporation. This highlights the ripeness of such fundamental green building features to be implemented within local building legislation. The findings also highlight other features, such as sound insulation, the use of recycled materials, and dedicated space for waste separation, which may require further incentives for their widespread adoption across the industry.