It’s the age old question, does creating an efficient, sustainable home actually add value to my house? It seems the answer could be a big fat “Yes”.
We’ve been doing some research lately and found that overseas, particularly the UK and the USA, homes that are energy efficient (determined by the Energy Performance Certificate (EPC) and/or the features of the house) do actually obtain higher market prices.
In the UK a report called ‘An investigation of the effect of EPC ratings on house prices’ was released in July 2013. The study found an average of 14% higher market prices being obtained for homes in the top 2 tiers (A and B) when compared to the lower tiers.
In the USA, another research report has found that price premiums of energy efficient homes are between 3-10% (where independent green certification ratings are available). Additionally these homes sold on average 30% faster than their counterparts.
Here in Australia we can refer to the only State, sorry Territory, that has mandatory performance ratings, the ACT. A report compiled back in 2006 found that for every 1 star level (on the Thermal Performance Assessment rating scheme for NaTHERS) the house improved, on avearage its market value increased by between 3-5%. So if a house was 3 stars higher than the norm (being about 1 star), it could obtain between 9-15% higher market pricing.
However PRD Nationwide have been conducting some studies in this area with other key industry bodies and have identified that “Across Queensland, New South Wales, and Victoria there is an average of 33% increment in the sales price of houses which had specific sustainability-related features . This is a hidden economic benefit that not many people know.” source Dr. Diaswati Mardiasmo, National Research Manager, PRD Nationwide. The full report is not yet available but the preliminary findings are very encouraging.
So yes, having verifiable ‘green’ features through independent certification or features of a home, does seem to add significant value to a house.
But what do people really think?
The research noted above demonstrates the positive impact of ‘green ratings’ on the residential market. But most of our houses are unlikely to have a rating because they are not actually required at the point of sale or lease and they can be expensive to obtain. For houses without ratings, the features then come into focus. So what features do consumers really think adds value?
A survey conducted on adding value to a home by realestate.com.au in May 2015 found that…
• 85% of respondents believed solar panels increased the value of a property and they are the top ‘green’ feature to increase a home’s value,
• 78% believed it would add up to $10,000 to the price of a home,
• A similar number agreed it would make the home more attractive to potential buyers, and
• 40% of renters surveyed said they would be willing to pay $10 more in rent per week for a house with solar panels.
Other items that respondents thought increased a houses value included solar hot water systems (79%), energy efficient appliances (78%), water tanks (70%) and water saving fixtures (49%).
So choose the highest star rating on the home you can and bring on the green bling. Not only will you enjoy the benefits while you’re living there, you’re likely to be better off when you next sell.