Energy efficiency is moving from a largely hidden feature of Australian homes to a factor agents may increasingly need to understand and communicate, as new research links better-performing properties with buyer demand, sale prices and rental returns.
The Efficiency Edge report, released by Cotality and the Real Estate Institute of Australia (REIA) this week, examines how energy performance is influencing residential property transactions and how the industry will need to adapt as greater disclosure is introduced.
The issue is significant given almost 97 per cent of Australian property listings do not currently disclose a home energy rating, according to separate research cited by Cotality Chief Commercial Officer Lisa Jennings.
“Australians can compare the energy efficiency of a washing machine in seconds,” Ms Jennings said.
“Yet when we buy a home, the largest purchase most of us will ever make, too often we’re expected to make a million-dollar decision without knowing what it will cost to run.
“It’s a problem hiding in plain sight.”
Ms Jennings said the lack of information could have financial implications for both sides of a property transaction.
“Buyers will commit to running costs that are unknown to them at the point of sale. Sellers will forgo value that is sitting invisible inside their property.
“That cost and that value are the same thing: how much energy the property needs to run.”
The report found around 70 per cent of established Australian houses, excluding apartments, are estimated to perform below four stars out of 10 under NatHERS, compared with the seven-star standard now required for new homes.
Improving a home from three to five stars can reduce heating and cooling energy use by around 40 per cent.
Cotality analysis of more than six million Australian homes also found houses with solar panels achieved prices around 2.7 per cent higher than comparable properties without solar.
Separate analysis found each additional NatHERS star was associated with an estimated average 1.3 per cent greater value nationally.
Ms Jennings said energy costs were often viewed through the lens of finding a cheaper provider, when the property itself played a fundamental role.
“Your energy plan sets the price of energy at any given moment. But it is your house that determines how much energy you need to buy over the life of your occupancy,” she said.
“A better-performing house, on the other hand, lowers your bill every single year without any further action taken.”
For agents, one of the difficulties is that many of the features affecting a home’s performance are not readily apparent at an open home.
Insulation, glazing, orientation and draught sealing can have a significant bearing on energy use but are often hidden or inconsistently described in property listings, according to the report.
At the same time, consumer interest in the information is already high.
Australian Government behavioural research cited by Cotality and REIA found 86 per cent of participants considered it important to see a home’s energy rating when buying, while 75 per cent considered it important when renting.
“And Australians do want to know this before they sign,” Ms Jennings said.
Energy performance shows up in property results
While Cotality and REIA caution that energy performance is only one factor affecting a property’s price or rent, alongside characteristics such as location, design and condition, case studies included in the report demonstrate how it can form part of a property’s value proposition.
At 3/8 Wood Street in Fremantle, a three-bedroom townhouse within the East Village at Knutsford development sold for $1.555 million in April 2026.
The property had a 7.5-star NatHERS rating and included rooftop solar and access to a shared community battery.
The sale price was about $279,000, or 22 per cent, above the comparable three-bedroom unit/townhouse median cited in the report.
The campaign generated 230 enquiries, 90 inspections and six offers, with selling agent Kat Goddard reporting that the property attracted buyers from well outside Fremantle’s traditional catchment.
The rental market provides another example.
A family relocating to Canberra considered two four-bedroom homes in O’Connor: an older 2.5-star property renting for about $1,000 per week and a six-star property at $1,350 per week.
They chose the six-star property despite paying $350, or 35 per cent, more each week. The report notes the higher-performing home was newer, larger and had an additional bathroom, while its energy performance also formed a key part of its value proposition.
After moving in, the tenants’ first electricity account recorded a $146 credit, including a government rebate.
Ms Jennings said the examples should not be treated as evidence that energy performance alone produced the price differences.
“These examples are of course anecdotal. But running costs are becoming as important to buyers as mortgage repayment costs, showing up in what sellers can achieve,” she said.
The report also points to the potential significance for agents of making features such as solar more visible to buyers.
“Solar panels can be seen from the street and are usually in listing pictures,” Ms Jennings said.
“Research shows they lift a property’s value by around 2.7 per cent, or roughly $23,100 on a typical property.
“So buyers and renters are already paying more for the savings they can see. But there are more savings within many properties that are just as capable of being shown like this.”
Disclosure moving closer
The findings come as Australia’s framework for measuring and disclosing home energy performance develops.
Stage 2 of NatHERS for Existing Homes launched on 1 July 2026, creating a nationally consistent pathway for assessing the energy performance of established homes.
All states and territories have also agreed to a nationally aligned Home Energy Ratings Disclosure Framework, although implementation and timing will differ between jurisdictions.
The ACT has required energy efficiency ratings at the point of sale since 1999, while NSW is introducing voluntary disclosure ahead of a mandatory scheme.
The NSW and Australian governments have also been conducting a Home Energy Ratings Disclosure trial to inform implementation at the point of sale or lease.
The changes have direct implications for the way agents market and discuss homes.
Cotality and REIA said home performance was likely to become another consideration during appraisals, listing presentations, leasing discussions and investment decisions, with solar, insulation, draught sealing, heating and cooling and electrification increasingly entering client conversations.
The industry is also working towards more consistent terminology. The PropTech Energy Efficiency Features Standard, developed through collaboration between government, real estate institutes and technology providers including Cotality, REA Group, Domain and MRI Software, establishes common fields for recording energy-performance features and formal NatHERS ratings across property platforms.
For agents, the report’s message is not that they need to become energy assessors, but that being able to explain what these features mean for buyers and sellers is likely to become increasingly important.
“Property professionals do not need to become technical experts, but they do need the confidence to explain home performance in practical language,” the report states.
“Those who build that capability early will be better placed to advise clients, communicate value and respond to changing market expectations.”
Ms Jennings said sellers and landlords also did not need to wait for disclosure requirements before making a home’s energy performance part of the marketing conversation.
“Sellers and landlords can choose to order one now and put it in their listing, so the savings that are already built into the home can also be priced into the sale or rent,” she said.
“Buyers and renters can also ask for one before they sign, to ensure they aren’t setting themselves up for bill shock.
“Because if a washing machine can offer you energy transparency, there’s no reason the house it sits in can’t too. And that answer may be worth a great deal more.”