Study: People willing to pay more for energy efficient homes
Much like in other parts of the world, Australians are willing to pay a premium for energy efficient homes. But the recent release of a study on the topic has prompted calls for a mandatory energy efficiency rating (EER) disclosure system to be rolled out nationwide, according to the University of Melbourne.
The research found that EERs carry weight with buyers and renters, providing a clear market signal for builders and owners to install more energy efficient systems, potentially reducing carbon emissions associated with housing.
University of Melbourne property lecturer Dr. Georgia Warren-Myers and University of Cambridge visiting fellow Dr. Franz Fuerst analyzed tens of thousands of property transactions made from 2011-16 in Australia's Capital Territory, where mandatory disclosure has been in place since the late 1990s.
The Australian Capital Territory is the only Australian state or territory to introduce mandatory rating disclosure for all dwellings, while nationally only new dwellings need a rating – a minimum six-star rating out of a possible 10.
Compared with three-star properties, properties rated five and six attracted premiums of 2 and 2.4 percent, respectively. Properties that went further on energy efficiency to gain a seven-star rating attracted premiums of up to 9.4 percent.
In the rental market, five and six-star properties rented for 3.5 and 3.6 percent more, respectively, compared to three-star properties. Gains flattened at seven and eight stars.
Warren-Myers argues that a mandatory disclosure program Australia-wide would drive broader energy efficiency in existing properties, particularly in the rental market where landlords lack incentives.