A new report on green condominiums in Toronto finds resale prices go up when projects are Leadership in Energy and Environmental Design (LEED)-certified.
TD Economics’ “The Market Benefits of Green Condos in Toronto” stated LEED-certified buildings represent an increasing share of new construction, including the condo market. Using novel dataset, it found LEED certification increases the resale price of Toronto condos by five to 14 per cent. The impact on other metrics, such as time on the market and maintenance fees, is found to be mixed as there was not a significant impact on the number of days on the market, but maintenance fees on Gold-certified buildings were 0.5 per cent lower on average.
LEED principles are making their way into Toronto’s condo market—one in every 15 new developments is currently achieving certification. To become LEED certified, the buildings must satisfy the requirements set out by Canada Green Building Council (CaGBC). The building designers pick features to enhance energy and water use, indoor air quality (IAQ), material use, and reduced environmental impact.
The report identifies possible reasons why buyers would be interested in green condos—the first being the advantage of potential monthly cost savings. Buyers might also be worried the new technology used in some modern buildings might fail and ultimately be more costly to fix. Therefore, they would be willing to pay a premium for a LEED unit or building, which then reduces the selling price.
Some other highlights from the report include:
- LEED Silver building tend to sell for roughly 5.7 to 6.2 per cent more than non-certified building units;
- LEED Gold buildings are selling between 12.2 and 14.9 per cent more;
To read the full report, click here.