Energy-efficient homes are no longer just for the environmentally-conscious, with the latest research showing the significant value Australians place on sustainable properties.
Read the full report: PropTrack Origin Australian Home Energy Report - March 2024
The impact of this growing demand will reshape the market in years to come, with both buyers and renters searching — and paying — for energy-efficient features like solar panels and double-glazed windows. This will impact how we value properties in the future.
For the first time, PropTrack and Origin have joined forces, combining data and insights to explore attitudes towards energy efficiency within Australian homes.
According to Jon Briskin, Executive General Manager, Retail, Origin Energy:
"Powering a home used to just involve a connection to electricity and natural gas. Now there is much more to consider, from solar panels and batteries to electric vehicles, home electrification and emerging technology such as virtual power plants. "
The house of the future will be all electric and have multiple energy-efficient features. Image: Origin.Research shows residential buildings are responsible for about a quarter of overall electricity use and more than 10% of total carbon emissions in Australia.
That means energy-efficient housing has a pivotal role to play in both cutting carbon emissions and reducing the cost of energy bills for homeowners and renters.
With the current cost of living stretching household budgets for buyers and renters, incorporating energy-efficient features and appliances into homes can lead to substantially lower utility bills over time.
The PropTrack Origin Australian Home Energy Report reveals the motivations driving the installation of energy-efficient features, and sheds light on the obstacles hindering the adoption of energy-efficient features in homes.
Most respondents (59%) of the realestate.com.au Residential Audience Pulse Survey said they considered energy efficiency ratings important or extremely important when buying, renting, or building a home, driven by a desire to cut bills and lessen their environmental impact.
Among those who didn't value energy efficiency, a third saw it as non-essential, while others cited distrust in ratings and concerns about added costs.
Renters, facing rising rental costs, showed greater interest in energy efficiency compared to buyers, primarily seeking bill reduction.
Amid the rising cost of living, both homeowners and renters are actively seeking ways to minimise expenses, making homes with higher energy efficiency ratings an appealing solution for reducing energy bills.
People aged 50 and above value energy efficiency more than younger age groups, primarily aiming to reduce regular energy bills.
All age groups valued bill reduction, but those between 18 and 34 were particularly concerned about minimising bill shock.
Other age brackets value reducing environmental impact as the second most crucial factor.
Notably, 40% of respondents aged 18-34 expressed disinterest in energy efficiency, largely influenced by their renting status (46%), limiting their ability to add energy-efficient features to their rental properties.
More than 30% of Australians are renters, and intriguingly, they tend to value energy efficiency more than buyers, according to the realestate.com.au Residential Audience Pulse Survey data.
A notable 33% of renters deem energy efficiency extremely important, in contrast to just 21% of buyers.
This heightened focus among renters can be attributed to their acute concern for reducing energy bills.
With weekly median rents currently at record highs, renters are actively seeking additional avenues to save money.
Their heightened sensitivity to the possibility of sudden spikes in bills surpasses that of buyers, showcasing a pronounced emphasis on financial efficiency in their housing decisions.
The number one reason for buyers and renters to consider energy efficiency ratings important is to reduce regular energy bills.
With household incomes stretched by higher home loan repayments, or increased weekly rent, many householders are looking for ways to cut back on unnecessary costs.
Additionally, 56% of buyers and 52% of renters who responded to the realestate.com.au Residential Audience Pulse Survey cited a desire to reduce their carbon footprint and lessen their environmental impact as reasons for valuing energy efficiency.
Solar power stands out as the preferred energy-efficient feature for both buyers and renters.
According to the realestate.com.au Residential Audience Pulse Survey, a substantial 85% of buyers and 67% of renters expressed a keen interest in having solar panels installed.
This inclination towards solar power aligns with findings from the Origin Energy Customer Survey, January 2024, indicating that 59% of homeowners already have solar panels, a stark contrast to the 12% of renters living in homes with solar power.
Analysing the data further, Origin observes that older customers, particularly those aged 65 and above, are more likely to have solar power.
Geographic location plays a role as well, with rural customers showing a slightly higher propensity for solar panel installations.
The primary impediment to transitioning to an all-electric setup is the associated cost.
Almost half of the participants in the realestate.com.au Residential Audience Pulse Survey cited the expense as a significant hurdle, deeming it too costly to shift from gas and fully electrify their homes.
Additionally, 27% of respondents indicated that making this transition was not a current priority.
Read the full report: PropTrack Origin Australian Home Energy Report - March 2024
A lack of information about converting from gas to electric was a concern for 20% of respondents, suggesting more needs to be done to educate homeowners about the benefits of an all-electric property.
Notably, two out of ten respondents were renters, and their lack of control over property modifications served as a substantial deterrent to embracing an all-electric home.
Among all survey participants, just 5% reported that their properties were already fully electrified, emphasising the limited prevalence of this transition among homeowners.
Boosting the property's value emerges as a substantial incentive for homeowners to invest in energy-efficient features, with the perceived impact on property prices influencing the prevalence of installations.
Notably, 73% of respondents in the realestate.com.au Residential Audience Pulse Survey identified solar power as the feature that adds the most value to a property. Double-glazing was also deemed valuable by 46% of participants.
While solar panels were universally considered the most value-adding feature across all states, preferences for other energy-efficient additions varied regionally.
In Queensland, 50% of respondents believed rainwater tanks added significant value, while in Tasmania, where winters are cold, insulation took priority.
Respondents from the Australian Capital Territory, New South Wales, and the Northern Territory valued the house's orientation relative to the sun.
In South Australia, half of the respondents considered home batteries the second most valuable addition after solar panels.
This regional divergence underscores the diverse factors influencing homeowners' perceptions of the value of energy-efficient features.
While survey respondents acknowledge the added value of energy-efficient features in a property, a significant portion appears reluctant to pay a substantial premium for a property already equipped with such features.
Interestingly, when it comes to solar panels, a relatively higher percentage (12%) of respondents expressed willingness to pay at least 5% more for a property with this specific feature.
However, for a fully electrified property, more than two-thirds of respondents indicated they wouldn't pay any extra.
Furthermore, 61% of respondents stated they would not be willing to pay an additional amount for a property with an electric vehicle charger, suggesting that the adoption of electric cars remains relatively low and has not yet significantly influenced property valuations in the respondents' considerations.
The data indicates a widespread embrace of energy-efficient features among Australians, driven by a collective goal to reduce bills and environmental impact.
More than three million homes currently have solar panels, a number that is steadily increasing.
While homeowners are already keen on insulation, double-glazed windows, and water tanks, there remains untapped potential for enhancing energy efficiency in both owned and rented properties.
The primary deterrent, cost, hinders the broader adoption of these features, but as solar, battery and electric vehicle prices decrease, a surge in adoption is anticipated.
More homes in the future will be electrified, with solar on the roof, a home battery to store unused solar energy, and an EV in the garage that will also act as a battery on wheels.
More than 3 million homes currently have solar panels, a number that is steadily increasing. Image: Getty.[/caption]
Our homes will also have many more connected smart appliances that will be able to optimise when they are switched on so that they are using electricity when it is cleaner and more affordable.
Most of the technology that will enable this ‘home of the future’ is here already, and the opportunity is to make sure that all households have access to the information and support they need — and the right solutions — to help realise the benefits of this smarter energy future.
Read the full report: PropTrack Origin Australian Home Energy Report - March 2024
