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Demand increasing for energy efficient homes

Demand for energy efficient homes is on the rise as cost of living pressures are forcing Australians to look for more affordable options.

Increasingly, the energy efficiency of homes is becoming more important to homebuyers, with more than half (56 per cent) of respondents in the June-July 2022 Residential Consumer Omnibus Survey considering energy efficiency ratings for homes as extremely important – up 17 per cent compared to last year.

According to the PropTrack Energy Efficient Housing Report, reducing energy bills (76 per cent) was the main reason property seekers saw energy ratings as important.

Solar power (93 per cent) remains the most commonly searched energy efficient feature by property seekers on

PropTrack Senior Analyst Karen Dellow said energy efficiency had become increasingly important in the property industry in recent years as homeowners seek to reduce their impact on the environment and save money.

“With the cost of energy bills rising and inflation top-of-mind for many households, energy efficient features, such as good insulation and solar power, are in high demand as they can save money on energy consumption and add value to a home,” Ms Dellow said.

Ms Dellow said despite the strong demand for energy efficient homes, only 7 per cent of homes listed for sale on nationally have an energy efficiency rating declared.

“Since 2013, new apartment developments and stand-alone houses have had to meet a minimum Nationwide House Energy Rating Scheme (NatHERS) rating of 6 as a baseline,” she said.

“In August, state and federal building ministers agreed to update the National Construction Code (NCC) to increase the minimum rating to 7-stars. 

“As new housing stock is built, the national and state level energy efficiency scores are increasing. 

“Currently, the national rating is 6.2 while the ACT has the highest rating at 6.9.”

According to Ms Dellow, the requirement to declare the NatHERS rating in the ACT has had a positive effect on the level of importance buyers and sellers place on energy efficient housing. 

“Only the ACT has a significant proportion of properties that meet the economically optimal rating of 7.5, with 22 per cent of rated properties there or above,” she said.

“Energy efficiency is on property seekers’ minds, and currently supply is not meeting demand.” 

Ms Dellow said interest in energy efficient options has only continued to grow in recent years.

“Whether through a new build or a renovation, the opportunity for developers and homeowners to incorporate energy efficient features into their homes has only grown stronger in this last year,” she said.

“Improving the energy efficiency of housing in Australia will not only reduce energy bills for the owner. 

“According to the Climate Council, it will also create jobs in the building sector. 

“Rolling out mandatory declaration of NatHERS ratings across Australia could see more of a concerted effort from sellers to improve the energy efficiency of their properties, helping to meet the demand for energy efficient homes from property seekers.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.