Sustainability has become a big selling point for today’s home buyers, with Australians seeking more sustainable housing options than ever before.
Australian home buyers are looking for sustainable housing options to make sure that their next purchase is as green as can be. A new REA Insights report shows that energy efficiency is top of mind for many Aussies looking to buy, rent or build homes.
74% of people surveyed said it’s either important or extremely important to their purchase decision. So, what are the most sought-after attributes that environmentally conscious people are looking for in their prospective homes?
According to a report published by CSIRO last month, Australia has successfully broken its own record once again for the number of solar panels installed in 2020, with a nearly 30% increase from the year before.
Energy Efficient Lighting and Appliances
The little things can go a long way in sustainable housing. LED lights use around 75% less energy and last 5-10 times longer than traditional halogen lights, meaning the average household will have the up-front cost of the new bulbs paid back in energy bill savings within the year, according to Energy.gov.au.
Household appliances can account for around 30% of your home’s energy usage, so choosing appliances with high energy efficiency ratings, whether it’s an air conditioning unit or a television, will reduce your bills and your impact on the environment.
Home heating and cooling is the culprit of high electricity bills for many Australians. Create a more sustainable home by ensuring your residence is fitted with top-quality insulation that meets or exceeds the recommendations for your region. You could save big bucks in the long run.
Airflow is a crucial aspect of having a comfortable and sustainable home. Limiting natural ventilation (when air enters through cracks and gaps) ensures your home stays as airtight as possible.
A property’s position in relation to the sun, rainwater tanks, type and size of windows, grey water tanks, and sustainability of building materials also ranked highly.
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Another great benefit to incorporating energy-efficient features in your home is the reduction in energy bill prices. 84% of people polled cited smaller energy bills as their biggest reason for taking note of a home’s energy efficiency rating.
While most Australians see a home’s energy efficiency rating as an essential talking point, the federal government has yet to set a national standard for defining efficiency ratings and making that information accessible to all.
Data analyst Karen Dellow of Realestate.com.au explained that while consumers are showing high interest in property energy ratings, most Aussies will have to jump over extra hurdles to uncover that data as the ACT is the only state that has yet to enforce a regulated scheme for disclosing this information to buyers.
“Property seekers want to make purchasing decisions based on energy efficiency; however, this can only happen if they have access to all the information”, Dellow shared.
“Without a nationwide mandate on declaring the energy efficiency rating, especially when selling a property, property seekers must dig deeper to find this information.”
Aside from the ACT, where 96.9% of home listings disclose their energy efficiency rating provided by the Nationwide House Energy Rating System (NatHERS), Victoria comes second with a mere 15%, trailed closely by Western Australia, Queensland, Northern Territory, and South Australia all falling between 10% – 15%.
Tasmania and New South Wales sit at the bottom, with only 5.3% and 4.5% of sellers providing their NatHERS ratings.
Despite 2013’s government mandate putting minimum energy efficiency requirements into place for all new apartment developments and stand-alone homes, studies from RMIT, CSIRO, and the University of South Australia have shown that only 80% of new houses are being built to meet the minimum requirements, and just 1.5% are built to perform at the “economically optimal” NatHERS rating of 7.5 stars or above.
A mandate requiring energy-efficient upgrades to be made to existing homes has yet to be created, but it should be done to drive the movement forward, according to Dr. Neville Hurst, Senior Lecturer at RMIT University’s School of Property, Construction, and Project Management.
“In the established housing market, there is no mandatory requirement for disclosure or even to have a house rated in anyway”, Dr. Hurst explained.
An initiative helping drive environmentally conscious developments is Bank Australia and Clean Energy Finance Corporation’s green home loan scheme.
The program was founded last year and aimed to attract 70 applicants within the first 12 months but exceeded their expectations by double, with 140 households taking up the offer to become more sustainable.
Bank Australia’s managing director Damien Walsh says that those numbers only represent 1.3% of the junior bank’s loan book today, but he expects that number to continue to grow over time as the demand increases for more sustainable lifestyles.
“Ultimately we want to grow the share of our loans that are supporting people to live more sustainably”, said Mr. Walsh.
“But, more importantly, we want to see more lenders create incentives to make Australian homes green and reward people taking positive climate action. We hope the Clean Energy Home Loan is a catalyst for green mortgages to become mainstream in Australia.”
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Another exciting development is the newly launched discounted green home loan financing options from Firstmac, Australia’s largest non-bank financial institution backed by the CEFC and Japanese bank, Norinchukin.
This $750 million green mortgage-backed securitisation program provides borrowers with a 0.4% finance discount for up to five years on loans of up to $1.5 million, while construction loans can receive a discount of up to 1.58%.
In order to qualify, homes must meet or exceed a seven-star rating under the Nationwide House Energy Rating Scheme (NatHERS).
“With the average home having a life span of 50 years or more, these investments have the potential to lock in lower energy consumption over the long term, as well deliver more comfortable homes that are cheaper to run.“
Words by Rimas Veselis
REA Insights Energy Efficiency Housing Report June 2021
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