EPBD 2026: What the New EU Directive Means for Real Estate Investors

Starting in 2026, the updated Energy Performance of Buildings Directive (EPBD) will come into force across the European Union, introducing stricter requirements for the energy performance of buildings.

The directive sets clear targets for both new constructions and existing properties, with the overarching goal of improving energy efficiency across the real estate sector, reducing carbon emissions, and aligning the building stock with the EU’s 2050 climate neutrality objectives.

Key Elements of the EPBD

The revised EPBD introduces several key requirements that will directly affect developers, property owners, and investors:

• Zero-emission buildings: All new constructions must achieve zero operational emissions by 2030, meaning no on-site carbon emissions from fossil fuel combustion.
• Residential upgrades: Existing residential buildings must meet minimum energy performance standards by 2030, with a further tightening by 2050.
• Public sector leadership: Public buildings are required to comply earlier, by 2028, to set an example for the private sector.
• Monitoring and automation: Large buildings must implement energy monitoring and automation systems to ensure ongoing efficiency.
• Financing frameworks: Member States must establish stronger mechanisms for funding, incentivizing, and promoting energy-efficient renovations.

For property owners and investors, this means the energy performance of an asset will become an increasingly important consideration in purchase decisions, asset management, and valuations. Poorly performing buildings will likely require significant investment to remain marketable, while energy-efficient properties are expected to command a premium.

Implementation in Austria

Austria is preparing to align its national regulations with the EPBD targets. According to the Austrian Federal Economic Chamber (WKO), the following measures are under discussion:

• Expanding the mandatory use of energy certificates to cover a broader range of real estate transactions.
• Requiring mandatory renovations for buildings classified as energy-inefficient (energy classes E, F, G).
• Increasing funding programs and subsidies for energy upgrades to support compliance.
• Launching information campaigns to raise awareness among property owners and smaller investors.

"Energy efficiency will become a decisive factor in property value assessments," says Igor Strehl, founder of Dunaj Family Office Consulting and a banking and real estate expert with over three decades of experience. "Properties that do not meet the new standards may see reduced liquidity and higher holding costs over time."

Considerations for Real Estate Investors

The upcoming changes suggest a need for investors to adjust their strategies and incorporate sustainability into their investment theses. Several factors should be taken into account:

• Due diligence: Future acquisitions should include a thorough review of a building’s current and potential energy performance, including renovation requirements.
• Capital planning: Investors must budget for the potential costs of upgrades when calculating expected returns and financing structures.
• Marketability: Properties that already meet or exceed efficiency standards are likely to attract stronger demand and provide better long-term stability.
• Compliance timelines: National legislative developments must be closely monitored to prepare for staged compliance deadlines across different asset classes.
• Tenant demand: Increasingly, corporate tenants are prioritizing sustainability in their leasing decisions, meaning that energy-efficient buildings may achieve higher occupancy rates and stronger rental yields.

"Forward-looking investors will integrate energy performance into their overall assessment of risk and return," Strehl notes. "This will be essential not only to comply with regulations but also to maintain the competitiveness of their portfolios."

Opportunities Beyond Compliance

While the EPBD presents challenges, it also opens new opportunities. The demand for green buildings is expected to grow, particularly among institutional investors who must meet ESG (Environmental, Social, Governance) criteria. Properties that can demonstrate strong sustainability credentials are likely to benefit from:

• Higher valuations due to compliance and lower operating costs.
• Preferential financing, as many banks are introducing green loan products with better terms for sustainable assets.
• Improved tenant retention, especially in commercial real estate, where energy efficiency can directly reduce utility costs and support corporate ESG goals.

For investors willing to act early, there is a competitive advantage in acquiring and upgrading assets before compliance deadlines create cost pressures and potential bottlenecks in the construction and renovation sector.

Conclusion

The EPBD will introduce measurable changes in the European real estate market over the next few years. While it will not fundamentally alter investment principles, it will require a more detailed evaluation of energy efficiency factors during the acquisition and management of real estate assets.

Investors who start preparing now, by identifying risks, planning upgrades, and understanding available incentives, will be better positioned to manage future regulatory requirements and maintain asset value in a changing environment. In many cases, proactive compliance will not only protect asset liquidity but also create opportunities to tap into the growing market demand for sustainable, future-proof properties.