Can the energy efficiency of a home affect its sale price

← Homepage

AS A society, we are becoming far more environmentally conscious. But how much would you be willing to pay for a home that was kinder to Mother Nature?

In 2013, the Department of Energy and Climate Change in the UK conducted a study into this, investigating the effect of energy performance ratings and the sale prices of residential properties in England.

The energy ratings of homes in the UK are measured with Energy Performance Certificates (EPCs), which are much like the energy rating stickers you will find on your new washing machine. EPCs contain information about a propertys energy use and typical energy costs, but also includes recommendations about how to reduce energy use and save money.

In the UK, EPCs are needed whenever a property is built, sold, or rented. It is mandatory for homeowners to order an EPC for potential buyers and tenants before they market their property for sale or rent.

This isnt a requirement in Australia, however, did recently launch an Energy Scores tool, which gives the properties on its site their own energy efficiency rating.

According to, three quarters of its users surveyed said they are concerned about the cost of electricity and four in five said they are actively trying to conserve energy as much as they can.

So as society continues to try and decrease their energy footprint, the UK study has shown that people are indeed prepared to pay more for a home that is more energy efficient.

Dwellings rated G an EPCs least efficient rating sold for 6 per cent less than dwellings rated F. Homes given a rating of A or B, at the most efficient end of the spectrum, sold for approximately 14 per cent more than a G-rated home.

The analysis included 325,950 properties of various ages, types and sizes.

Australia may not require the same level of formality around energy efficiency in the home just yet, but Johnny Cussen, REA Groups executive manager search and web, said he expects us to eventually follow the UKs lead.

My expectation is that it will become more and more important and will become a factor, Mr Cussen told

Even more so when information on a homes energy footprint becomes more accessible and publicly available here. Mr Cussen predicts Australia might even go down the path of making it a mandatory requirement of selling or leasing a property, as in the UK.

We dont have that in Australia yet but I do think that as this information becomes more available, buyers and renters will make the energy efficiency of a home part of their decision making, including what they are prepared to pay, he said.

I wouldnt be surprised if we saw [energy efficient ratings] in Australia in the future.

So will this affect house prices in Australia? It is very likely.

What I can say is I think it increases the confidence of the buyer and with more confident buyers it is an assumption that we would expect property prices to increase for energy efficient homes, Mr Cussen told

While I do think that energy efficiency is already a part of peoples property purchase and rental decisions, I think with a standardised approach people will be able to do a more effective job of comparing and contrasting properties, and I believe that will play into the pricing of the property.

Whether it will be the same extent in the UK, where energy costs are even higher than in Australia, I cant be certain. But I do believe the future isnt about falling energy costs, it will be about rising energy costs.

Australia has some of the highest electricity rates in the world. According to one analysis of Australian Bureau of Statistics data, prices have risen 120 per cent over the past 10 years nationally.

And this month, a new Australian design and construction firm, Home by Htt, was launched in Melbourne, which claims to have created Australias first luxury fossil-free, carbon-neutral homes. The first homes are expected to be released in Autumn 2017. The firm was founded by the same team behind the award-winning Melbourne Design Studios.