Energy efficiency is becoming a key selling point in the Australian property market. As buyers grow more conscious of rising energy costs and environmental impact, demand is increasing for homes that are sustainable, comfortable and cost-effective to run.
According to recent analysis, energy-efficient homes are selling for 14.5% more nationally (Smart Property Investor) and energy-efficient homes with sustainable features can boost a property’s resale value by up to $197,000 (Domain).
In this context, home energy reports are emerging as a potential requirement for future property sales.
Let’s explore why they may be introduced, what they could mean for the industry and how you can prepare well and stay ahead of the trend.
What is an Energy Report?
A home energy report provides a detailed assessment of how efficiently a residential property uses energy, typically providing an energy rating based on national benchmarks. While reports vary by state or scheme, they generally include:
- an overall energy performance score or star rating
- assessment of heat loss, insulation levels, and glazing quality
- evaluation of heating, cooling, lighting and sometimes fixed appliances.
In Australia, tools like the Nationwide House Energy Rating Scheme (NatHERS) are already used to rate new builds. Some states, like NSW, also require limited disclosure of energy efficiency features when selling or leasing.
While most energy reports are currently voluntary for existing homes, there is growing discussion around making energy disclosure mandatory at the point of sale, similar to other international markets.
Why Governments May Introduce Mandatory Energy Reports
Governments are increasingly considering mandatory energy reports for houses at point of sale to help buyers make more informed decisions to meet national climate targets. Here are the main reasons behind this potential shift:
Transparency for Buyers
Providing a clear, standardised energy report helps prospective buyers understand likely running costs and the home’s energy efficiency before making a purchase decision.
Supporting Climate and Emissions Targets
Mandatory energy reporting aligns the residential housing sector with broader national commitments to reduce carbon emissions and promote sustainable living.
Driving Market Transformation
By encouraging sellers to disclose energy performance, governments aim to motivate energy-efficient upgrades and renovations before homes change hands.
Creating Consistency Across States
A national approach would unify existing mismatched rules (such as NSW’s long-established disclosure requirements) – making the market fairer and easier to navigate.
Evidence from Other States and Overseas
Internationally, similar schemes are well-established. For instance, the European Union’s Energy Performance Certificates (EPCs) have been compulsory for years, offering a standardised rating system across member countries. The UK enforces EPCs at sale or lease. And several U.S. states have introduced energy disclosure laws tailored to their markets.
Evidence from these early adopters shows that homes with higher energy ratings often generate premium prices, reflecting growing buyer preference for sustainable, cost-effective living.
How Energy Reports Could Impact the Housing Market
Introducing mandatory home energy reports could create significant shifts for sellers, buyers and the market as a whole.
Impact on Sellers
Homes with strong energy performance ratings may attract more buyers and sell faster. Research from CSIRO indicates that properties with higher ratings can achieve sale prices up to 10% above comparable homes.
Conversely, homes with lower energy ratings could face price reductions or longer times on the market, unless sellers invest in energy upgrades prior to listing.
Impact on Buyers
Energy reports empower buyers to make more informed decisions by providing clear, comparable information on a property’s running costs, thermal comfort and environmental impact.
This transparency can reduce uncertainty and help buyers prioritise sustainability alongside price and location.
Impact on the Market
Widespread adoption of energy reporting may encourage homeowners to retrofit and improve energy efficiency before selling.
Over time, this could shift market demand toward sustainable housing features (such as better insulation, efficient heating and cooling systems and quality glazing), driving a broader transformation toward greener homes.
Potential Challenges and Criticisms
Introducing mandatory home energy reports does come with challenges.
The upfront cost of obtaining a report may deter some sellers, especially for older homes needing costly upgrades.
There are concerns that low ratings could unfairly devalue properties without reflecting future improvement potential.
Additionally, ensuring enough qualified assessors across the country is essential to avoid bottlenecks and delays.
Finally, educating buyers about interpreting energy ratings is crucial so they can make informed decisions, rather than misjudging what a rating truly means.
How Homeowners Can Prepare Now
Homeowners can get ahead by arranging a voluntary home energy report to understand their property’s current efficiency. Simple, low-cost upgrades, like sealing draughts, adding insulation or upgrading to energy-efficient lighting and appliances, can make a significant difference.
For others planning renovations, designing with future energy rating requirements in mind can save time and money down the line.
Tools such as energy modelling can help test the impact of different upgrades before committing, ensuring investments deliver the best results for comfort, cost savings and resale property value.
How Energy Consultants Can Help
For homeowners, expert energy consultants such as Application Solutions can guide you through the energy assessment process. Consultants typically conduct thorough, compliant evaluations, providing reports that meet current standards.
Beyond producing a rating, consultants can identify cost-effective upgrades tailored to each home’s unique characteristics.
This advice can help you improve comfort and reduce running costs, while preparing for potential future regulations.
By partnering with trusted consultants, homeowners and builders alike can confidently navigate the evolving landscape of energy efficiency requirements.
Prepare for the Future
Mandatory home energy reports for property sales are on the horizon.
For homeowners and industry professionals, preparing now can help you protect property value and benefit from the shifting market expectations toward more sustainable, energy-efficient homes.
Discover how simple changes can boost your property’s value and comfort. Book an energy assessment consultation with Application Solutions.
