Does Green Add Value?
By Greville Pabst - Certified Practising Valuer FAPI FRICS
CEO & Director, WBP Property Valuers
As concern perpetuates regarding the impact of climate change there is a growing shift in social consciousness and government policy towards the adoption of more environmentally sustainable practices and lifestyles.
The contentious topic has swept the globe with many countries establishing regulations to reduce energy emissions. In Australia we are witnessing the emergence of new regulatory policy to develop and enforce national housing energy efficiency standards.
Introduced in 2005, it is now mandatory for all new standard residential houses and apartments to comply with a 5 star energy rating. The national energy efficiency standard, while still relatively flexible, is aimed at reducing household energy emissions which result in the generation of an estimated 14 tonnes of green house gases by the average Australian household each year. Daily household activities such as heating and cooling, lighting and the use of major appliances are all large contributors to the production of greenhouse gases.
To address the issue, the Australian government has launched the Green Loans Program, a nationwide program to assess the sustainability of existing residential homes. The free service involves the review of a property by a qualified assessor who provides an assessment of a household's water and energy use and develops strategies for how the rating can be improved. As part of the Green Loans Program approved applicants are also eligible to receive a $10,000 loan with no interest for a period of up to 4 years, to purchase such green' technologies as water tanks, insulation and solar hot water systems, with the intention of reducing green house gas emissions and water consumption.
Furthermore, on January 1st 2010 the Queensland Government introduced a new regulation which requires sellers of residential property to complete and supply a Sustainability Declaration a two page form which assesses the energy, water, safety and access aspects of a property. This move follows the mandatory disclosure of energy consumption by sellers of residential property in the ACT, established since 1999.
But as similar regulations are introduced in other states how will property values be affected? Does subscription to sustainable trends really save you money and add value to a property? Well, according to an independent study commissioned in 2005 by the DEWHA, property in Australia's Capital Territory demonstrated a notable correlation between the energy efficiency rating of a house and its value.
While the trend towards sustainable housing is still relatively new the link between a property's energy rating and its value will only increase as knowledge and adoption of green' initiatives grows.
WBP is holding Melbourne Property Outlook 2010 on Feb 16. For more information visit www.wbpproperty.com or call 1300 302 581.