Stefanie Heinzle

The Influence of Green Building Certification Schemes on Real Estate Investor Behaviour: Evidence from Singapore

Based on an adaptive choice-based conjoint analysis, the aim of this paper is to ascertain the extent to which various characteristics of a condominium unit, and in particular the Building and Construction Authority (BCA) Green Mark Scheme, influence prospective real estate investors’ preferences for condominium units in Singapore. Through the analysis, this study determines that premium buyers would be willing to pay for property certified by the Green Mark Scheme. The results suggest that the price premium buyers would be willing to pay for green certification varies within the different levels of the Green Mark Scheme, ranging from 3.78 per cent for the Certified award to 7.98 per cent for the Platinum award. The results thus suggest a strong business case for developers of green buildings.

Introduction and Theoretical Framework

Consumption is a key lever to achieving more sustainable development. Unsustainable consumption is a major cause of global environmental deterioration, including overexploitation of renewable resources and pollution caused by fossil fuels. The European Environmental Agency report “Household Consumption and the Environment” (EEA, 2005) identifies the need areas of food, housing, personal travel and mobility as well as tourism as the four major areas of household consumption with the highest negative environmental impacts.

Results of the SECO@Home Household Survey and Discrete Choice Analysis (Conjoint Studies)

The 92/75/EEC “Energy Labelling Directive for Household Appliances”, adopted in 1992, requires retailers to display a compulsory label for fridges, freezers, washing machines and several other product categories. The labels show the level of energy consumption at the point of sale (COM 778, 2008).

Firm Strategies and Political Instruments

Our world has changed faster than anybody expected: global warming, an awareness of widespread environmental deterioration, fundamental political transformations (Karna et al., 2002). Social issues and corporate responsibility in general and environmental matters in particular have gone from the sidelines to the forefront of consumers’ minds, academic research and management thinking (Chan and Lau, 2004).