First published in The Sunday Age, Domain
New figures show that making your house more environmentally friendly does indeed increase its value.
IT’S official – higher energy star ratings mean higher sale prices. Research released in December by federal Environment Minister Peter Garrett provides hard proof that the real estate market now values eco-efficiency.
The Australian Bureau of Statistics (ABS) studied sale prices and star ratings in the ACT and found that for a house worth $365 000, increasing the rating by half a star would add, on average, nearly $4500 to its price.
For homeowners, the new evidence is just one more motivation to take up government rebates for household makeovers – from modest shower roses to grand solar panels. And this year, there’s a suite of extra regulations and incentives to get you thinking eco-smart.
Tony Arnel, Victoria’s Building Commissioner and the chair of the Green Building Council of Australia, says research is piling up – from the United Nations Environment Program and consultants McKinseys, among others – showing that aggressive investment in reconditioning our buildings would have a lush green payoff, even in the short term.
“The building sector, including housing, has been identified as being able to quickly reduce greenhouse gas emissions at least cost,” he says. “We’re having an economic recession but interest in sustainable built environments won’t waver. It will continue to accelerate in 2009. We’re seeing a whole new industry based on water- and energy-saving technologies.”
The insulation trade is running hot. As a part of its anti-recession spending, the federal government will pay for ceiling insulation (up to $1600) in homes that currently don’t have any. It has also increased the rebate for solar hot water systems (now $1600) and the rebate helping landlords insulate their rental properties (now $1000).
The federal government’s Green Loans scheme is also set to start mid-year. It will offer around 200 000 households a free sustainability assessment and then, access to a low-interest loan of up to $10 000 to put the recommendations in place.
While the details aren’t yet finalised, to be eligible for the loan, a household must earn less than $250 000 a year. The government estimates that the scheme will inspire $2 billion of environmentally smart investment.
Here in the wilting garden state, the government’s Victorian Energy Efficiency Target (VEET) kicked off on January 1. It requires that the energy retailers encourage customers to install efficiency measures. Overall, the VEET aims to reduce greenhouse gas emissions enough to make 675 000 houses carbon neutral for a year. With nearly all our electricity coming from high-polluting brown coal, any cut in usage will be good news for the atmosphere.
Governments aren’t the only ones encouraging us to spend green – the private sector is also beginning to rally. The credit union mecu now offers an ‘Eco Pause’ option on its home loans, where borrowers can stop their repayments for three months, or pay half rates for six months, if they spruce up their abode with enviro-friendly features. The credit union also provides discounted interest ‘goGreen’ personal loans to pay for home efficiency improvements.
That’s all good news for Lyn Beinat. With her husband Maurice, she runs ecoMaster, a home energy audit and retrofitting business with 20 staff. EcoMaster assesses the thermal, energy and water performance of buildings. It prepares detailed, costed action plans and has an installation crew that will put the recommendations into place.
The couple’s experience overhauling their own house prompted them to start the business. Years ago, they returned to Australia after a stint in the UK and moved into a very cold house in Mount Macedon. “Our kids used to cry in the morning, ‘Can we go back to England Mummy? It was warmer over there,’” Ms Beinat laughs. “You know there’s something wrong with your house when your kids think that!”
With lots of hard work, they cut their electricity use by 80 per cent and at the same time, raised their winter temperatures from an average of 14 degrees to about 21. “You can have a real win-win out of fixing up your home. Our house is rated six star now,” Ms Beinat says. “It was rated one star when we started, and we’ve done it for less than the cost of stamp duty.”
While the energy audit industry is about to take off, Ms Beinat says business hasn’t been easy. Many people haven’t seen the value of spending money on home efficiency. Energy and water prices may be on the rise, but they are still low enough that some retrofitting measures, especially the more expensive ones like solar panels or double-glazing, take years before they pay for themselves.
“People certainly don’t get a return on investment from new carpets, but they still buy them,” Ms Beinat says. “So why do we only apply an economic filter to ceiling insulation or changing to low energy lights?”
In any case, with her own experience in mind, she argues that retrofitting is one of the few things a homeowner can do to give increased comfort as well as a monetary benefit, in the form of lower bills.
The evidence that better star ratings mean higher house prices adds even more kick to her claims. The ABS research was conducted in the ACT where, since 1999, homeowners have been required to declare their house’s energy efficiency rating when they advertise it for sale. The rules were brought in to provide extra information for consumers.
According to the Federal Environment Department (DEWHA), the scheme helps buyers understand what they’re getting and improves the efficiency of real estate valuations. It also pushes owners to retrofit their homes. The study shows that the cost of adding stars will often be far lower than the extra payoff when it comes to selling.
DEWHA is now working with the states to develop a mandatory disclosure scheme that would apply nationwide, and may include houses up for lease as well as those for sale.
The low-energy way to beat the heat
HARRY Blutstein and Carol Lawson moved into their Northcote townhouse in early 2007. It didn’t take long to realise something wasn’t quite right. “It got very, very hot,” Mr Blutstein says.
The neat brick townhouse has three levels, including an attic study where Mr Blutstein works. It was always a very comfortable house, the couple says – so long as they kept the cooling running constantly on warm days. Even worse for their bills, the in-built heating and cooling system was all or nothing. It couldn’t be set to control just one floor.
“This house was architect designed,” Mr Blutstein says. “It was built about 12 years ago, but you almost couldn’t have done a worse job in terms of making it less environmental. So we decided we needed professional advice.”
Although Mr Blutstein works in the sustainability field, he didn’t have the hands-on building know-how to assess the problems and fix them. “Neither of us are handy people,” says Dr Lawson, a GP. “Neither of us does more than the most basic things around the house. It was a big plus to get good practical advice and then have the work done under the one hat.”
They hired ecoMaster to assess their home and recommend steps to cut their energy use. The first step (and the cheapest, at about $300) was draught proofing. The crew installed flip-down draught stoppers and foam seals on doors as well as timber beading around architraves. “In everything we did, that was the best,” Mr Blutstein says. He was surprised to learn just how leaky most homes are – ecoMaster estimates that draughts account for a quarter of all winter heat losses.
Next, they swapped two-dozen halogen downlights with low-energy replacements and put in heavy window drapes on windows that didn’t have them. They installed a 2500-litre water tank for their courtyard garden and switched the old electric hot water service for a super efficient heat pump system.
They also fitted a large external blind to shade the west-facing rooms from the hot afternoon sun. To cool the sweltering attic study, ecoMaster added insulation and recommended a sky window for the south roof face and blinds on north and west windows.
Mr Blutstein estimates that all up, they’ve spent about $10 000 and halved their electricity use. “We could have been comfortable the inefficient way, always heating and cooling the whole house,” he says. “But now we’re getting a much better result for the environment.”