Most people looking for a property value a home’s sustainable features, particularly if it means they can cut their energy bills, realestate.com.au research shows.

The REA Insights Energy Efficiency Housing Report, released on Wednesday, shows many people also want to be more environmentally friendly with their choice of home. 

Report author and realestate.com.au data analyst Karen Dellow said energy efficient ratings and energy saving features are important to property seekers looking to buy, rent or build.

“Despite the high interest shown by consumers for property energy ratings, the ACT is the only state or territory that has a regulated scheme to disclose the energy efficiency rating of housing to prospective buyers,” Ms Dellow said.

Ms Dellow said US research showed that declaring an energy efficient rating influenced the value of a property and encouraged owners to make energy efficient improvements to their home.

“This is a win-win for buyers, sellers and the environment,” she said.

“Property seekers want to make purchasing decisions based on energy efficiency; however, this can only happen if they have access to all the information.

“Without a nationwide mandate on declaring the energy efficiency rating, especially when selling a property, property seekers must dig deeper to find this information.”

The listing for 125 Wintles Road in Victoria’s Leongatha South notes the home’s design draws on sustainable principles. Picture: realestate.com.au/buy

The latest realestate.com.au Residential Consumer Omnibus Survey showed 74% of property seekers believe energy efficiency ratings are important when buying, building or renting.

Almost half (48%) of the 1900 people surveyed online in April deemed the ratings to be extremely important.

Reducing regular energy bills was the top reason consumers cared about energy efficiency ratings, marked as being important by 84% of survey respondents.

A range of environmental reasons came next: being environmentally conscious, doing something good for the environment and reducing carbon emissions/the impact on the environment. Each of those were rated as important by about 60% of respondents.

Dr Neville Hurst, a senior lecturer in RMIT University’s School of Property, Construction and Project Management, said the issue of energy efficient housing was becoming more topical.

As to whether buyers would pay more for an energy efficient house, Dr Hurst suggested that in future they were probably more likely to discount a home that was not as efficient, as occurred at one stage for homes that still had outside toilets.

“People didn’t pay more for a house that had a toilet inside. What they did was they discounted the house that didn’t by the amount of money it would cost to get one put in,” he said.

“I suspect this is what’s going to happen here, that people will start discounting less energy efficient houses by the amount it costs to put in solar panels or whatever they want.

“But that won’t happen until we get this definite appetite by buyers, which I don’t think we’re too far away from.”

The most-desired sustainable property features

Ms Dellow said solar power, energy efficient lighting and insulation quality are of high importance to those looking for a property.

Solar power was the top preference for a home sustainability feature, rated by 81% of survey respondents.

Energy efficient lighting, quality insulation and good air flow measures such as draught proofing and ventilation also ranked highly.

Greywater systems were of least interest among the options provided, although 43% of survey respondents were still interested in that sustainable property feature.

Ms Dellow said search data from realestate.com.au supported the findings of the consumer survey.

Solar power made up 92% of energy efficient keywords used in searches. The next most popular search term was water (or greywater) tanks.

Solar panels and water tanks were also the most common energy efficient features found in realestate.com.au listings nationally.

Ms Dellow said Queensland had more listings with those features than other states, as well as more off-grid properties.

This off-grid property at 196 Broken Bridge Road in Conondale on the Sunshine Coast has solar power and a diesel backup generator. Picture: realestate.com.au/buy

Which state leads the way in energy efficiency?

The report showed Victoria had the highest number of total listings declaring energy efficient features in the property description on realestate.com.au in the last 12 months, followed by NSW and Queensland.

Ms Dellow said energy efficient suburbs were predominantly in areas with high development over the last five to 10 years. “This is because the minimum energy efficiency requirements would apply to more properties and the volume of new builds has been high,” she said.

Clyde North in Melbourne’s outer south east was the suburb with the most listings with energy efficient features.

When it came to the number of energy efficient listings as a proportion of all listings on realestate.com.au, Tasmania came out on top.

Tasmania had 25% of listings with at least one energy efficient feature declared, followed closely by the ACT on 24%.

“While Victoria has the highest total number of listings with declared energy efficient features, only 13% of all listings had energy efficient features in the description,” Ms Dellow said.

“NSW was even lower with just 7%.”

Ms Dellow noted the data relied on vendors and real estate agents including those features in listing descriptions and the features being specifically looked for in the analysis, which meant there were likely to be more properties that have not been identified.

Dr Hurst said his research showed real estate agents did include energy efficient features in a listing if a house had that technology, such as solar panels, water tanks and double-glazed windows.

Tenants and people building homes look at energy efficiency

Dr Hurst said international research showed tenants were looking for energy efficient housing.

“You can see a lot in it for the tenant; they pay the rent and if they can have their energy bills reduced, fantastic,” he said.

But Dr Hurst said when people were buying established housing, energy efficiency was “somewhat lost” in the greater list of factors such as location and schools.

“It’s not going to be the reason why they buy house A over house B, I don’t think. There’s more important things,” he explained.

Dr Hurst said energy efficiency was an important consideration for people building houses, because of the Nationwide House Energy Rating System (NatHERS) that applied to new homes or major renovations.

The listing for 402/211 Sydney Road in Melbourne’s Brunswick notes the apartment is in a sustainable boutique block with an average 7.5-star energy rating. Picture: realestate.com.au/buy

NatHERS provides a star rating out of 10 based on an estimate of its potential energy use. The NatHERS website said a six-star rating is the minimum standard in most states and territories.

“It’s that mandatory requirement that’s brought it to the front end of the conversation that people would have [when building] because people are having to decide what types of technologies they want,” Dr Hurst said.

“But by the time they get down to the details, they’ve decided where they want to live and probably even the floor plan they want. Now they’re looking at the trimmings, and that’s where it comes up.”

Call for mandatory disclosure of a home’s rating

With the ACT having a regulated scheme to disclose the energy efficiency rating, 96.9% of property listings in the territory disclosed the NatHERS energy rating.

Victoria had the next highest number of listings with a declared energy efficiency rating with 15%, closely followed by Western Australia, Queensland and the Northern Territory.

Ms Dellow noted a study by RMIT, the CSIRO and the University of South Australia found four in five new houses were still being built to no more than the minimum energy standard. Only 1.5% were designed to perform at the economically-optimal 7.5 stars and beyond, the 2019 study found.

“With minimum energy efficient standards increasingly mandated by governments, the proportion of properties with star ratings above six is increasing,” Ms Dellow added.

Dr Hurst argued state and federal governments should work together to make it mandatory to disclose the energy efficiency of housing at the point of sale.

“In the established housing market, there is no mandatory requirement for disclosure or even to have a house rated in any way,” he said.

“I personally feel we need to mandate that in established homes in the same way we have in new homes.”

By Megan Neil