Houses Should Be Energy Rated

Houses should be energy rated in the same way as your fridge, dishwasher and washing machine.

Obviously a system already exists for this. NATHERS. But it’s not mandatory for people to disclose the energy efficiency of their house when they sell it or lease it out. This should be law. I believe in Victoria it is law to disclose the rating of commercial properties when they are leased or sold.

It would be a minor policy change with a significant impact, I believe.

People have the money to make their houses more energy efficient. The issue is that they waste it on cheap tricks to make their home more appealing before they sell it. This policy change would incentivise people to spend $15,000 on making their home more energy efficient, instead of wasting it on hire furniture and white paint to appeal to the market.

Why this is good policy

Houses use about 10% of Australia’s energy.

Australia has overarching obligations to improve our energy usage under the Paris agreement. There are various policy stances in our States that set targets in relation to this as well.

It won’t cost the government money to implement this, but it will influence wider market behaviour and incentivise people to make their homes more energy efficient. It will also provide consumers with more information so that they can make decisions accordingly.

Studies show that energy efficient homes have higher capital growth

This is already the case in the UK and the ACT. In both of those places, studies have shown that the market favours energy efficient housing. Houses that are more energy efficient achieve higher capital growth rates. This means that if your house is more energy efficient, you will make more money on it when you sell!

I believe that change will only happen if people are incentivised to change. And money is a great incentive.

Currently in Australia, the market favours shiny marketing. We can change this.

Logically, we all know that if we could compare houses that were available for sale in terms of their energy rating easily, it would impact our decision making. Energy costs are lower in these houses and consumers have a general preference towards energy efficiency.

It is worth noting that I believe that the results of these studies would be skewed to a degree because it is likely that the people who can afford energy efficient materials and fixtures would be wealthier than average, so their houses are probably already more desirable in other aspects such as location, design, etc. So, it is likely that they would have increased in value faster regardless.

But you can’t argue with the global trend towards preferring sustainable living. And I feel that by providing information about energy efficiency will help guide consumers towards houses that are more sustainable. It could even shift our preferences away from housing that seems desirable at the moment, by giving us information.

The data exists. And it has for some time. This would be a simple policy change for government to make. But it hasn’t been made yet. Mandate that people include their energy rating in their vendor’s statement. Give the market the information and see what happens. Incentivise homeowners to make their house more sustainable. Doing so would add value to their home, make it more attractive to the market.

If you would like to deep dive into the data, here are some resources I would recommend:

Better than spending $15,000 on furniture and white paint

I was a real estate agent.

I know what people do to get their houses ready for sale.

People spend thousands of dollars on bland furniture and a coat of paint to try and increase the value of their house.

This money would be better spent on a solar system and some insulation.

This way, old houses would slowly get upgraded to modern energy standards.

The fresh paint and rental furniture do NOTHING to increase the actual underlying value of the structure in the long term and NOTHING to benefit society.

Contact

If anybody feels the same way about this, can they please contact me about it. I know there are people in Victoria trying to make it law there. I would love to chat and discuss ways that we can get this legislated and/or increase awareness about it.

Lachlan Goddard is a planning lawyer with a background in property — www.lachlangoddard.com