Prospective home buyers and tenants will have access to a rating of the energy performance of the homes which they intend to rent or buy if recommendations of a landmark new report are enacted.

Published jointly by the Property Council of Australia (PCA) and the Green Building Council of Australia (GBCA), the Every Building Counts report calls for 39 actions across eight themes to shape a built environment which is healthier, more equitable and more sustainable.

The eight themes involve.

• Establishing a long-term strategy for zero-carbon-ready buildings
• Requiring all new residential and commercial buildings to operate on high-quality electric equipment in National Construction Code 2025
• Accelerating the shift to high performance buildings with targeted incentives
• Delivering an accelerated trajectory for resilient, all electric, zero carbon buildings in the building code
• Embedding the ‘energy efficiency first’ principle in the National Electricity Objective and other relevant legislation, statements and policies
• Committing to zero-carbon-ready for all new and existing government owned and leased buildings by 2030
• Expanding NABERS to cover all building types and extend the CBD program; and empower owners, buyers and renters with a single national rating for home energy performance; and
• Adopting a credible national framework for measuring embodied carbon

As one of its key recommendations, the report has called for mandatory disclosure of the energy performance of all residential homes and dwellings.

To achieve this, it calls for two actions.

First, the Commonwealth should work with state and territory governments to elevate the development of a single national rating scheme that would enable prospective purchasers and tenants to evaluate and compare the energy efficiency of homes which they are considering for purchase or lease.

The rating will provide a benchmark for market comparison of best performance sustainability performance. It would also disclose the status of solar PV provision (e.g. rooftop solar), energy storage, EV charging and electrification of heating and hot water systems on the property.

Work on the development of such a tool has been underway for several years. However, at this stage, the tool is yet to be released to the public.

Once such a system has been established and tested, the report further calls for the mandatory disclosure of the energy performance of each home.

Under one option, the report says that disclosure could be required whenever the dwelling is offered for sale or lease.

Another option would be to require disclosure at set intervals.

In its report, the PCA and GBCA argue that the importance of such an initiative should not be underestimated.

First, mandatory disclosure will help consumers to make informed evaluations and decisions regarding properties which they consider for purchase or rent.

This is important as household energy performance has a significant impact upon occupant expenses (energy bills), health, environmental footprint and overall comfort.

As thing stand however, consumers do not have suitable information upon which they can base informed evaluation or decisions.

Beyond that, a mandatory disclosure regime would help to reduce Australia’s carbon footprint by incentivising homeowners and landlords to upgrade the energy performance of their properties.

It may even help to unlock initiatives such as green loans provided by banks or green door approvals from local councils.

Property Council Chief Executive Mike Zorbas said that while most people are now accustomed to knowing the energy performance of their fridge, there is currently no similar rating system that gives homebuyers a clear picture of a home’s energy consumption.

“The energy rating on your fridge tells you if you are cooling your food and drinks efficiently, but there is no national rating scheme up and running to tell you about the efficiency of heating or cooling your whole home – your most important purchase of all,” Zorbas said.

“It’s high time all Australian home buyers and renters had access to a consistent national rating, so they know the energy bill costs and comfort levels to expect during colder months.”

GBCA Chief Executive Officer Davina Rooney agrees, saying that the implementation of a reliable rating system would allow buyers and renters to compare homes which are available on the market.

Other real-estate organisations support the broad principle but caution about the need to ensure that such a regime does necessitate undue burden or cost.

In a response to questions from Sourceable, Hayden Groves, President of the Real Estate Institute of Australia (REIA), said his organisation supports initiatives that improve the energy performance of Australian homes.

Groves says that having homes assessed and rated at the point of sale is a sensible policy that will enable real-estate consumers to more readily discern the value of high performing, energy efficient homes.

Indeed, he says that many agents already promote the benefits of high energy performing homes – albeit with many doing so informally rather than as part of a formalised procedure.

However, Groves cautioned about the need to ensure that any mandatory disclosure process does not impose any unnecessary burdens on sellers and their agents from a cost or administrative viewpoint.

In particular, Groves says there are concerns that the scope of the disclosure may be too broad and may add unnecessary additional expense and ‘green tape’ to the leasing and selling process.

He says the process will likely refine itself over time and lead to a more streamlined outcome.

As for the current situation, Groves says that consumer awareness regarding the energy performance of homes has increased and that many buyers and tenants are making reasonably self-informed buying and leasing decisions accordingly.

At the moment, buyers in particular are valuing homes which are more efficient over others which are not, he says.

For tenants, the basing of decisions around energy efficiency considerations is difficult in the current environment on account of the limited volume of available rental stock.

Should the supply/demand situation rebalance over time, however, Groves says landlords will face pressure to respond to the growing demand for energy efficient homes.

Beyond mandatory disclosure, the report calls for action in other areas.

In terms of resilience, it urges the government to act on a strategy to ensure that Australia’s building stock is able to withstand more frequent and severe weather events.

To ensure a just transition, meanwhile, the report advocates for initiatives and incentives to ensure that vulnerable people are able to share in the benefits of a cleaner and more energy efficient environment.

Finally, Rooney s that the shift to low carbon buildings will require reskilling and upskilling of workforce capacity.

In order to transition as many as 85 percent of homes off gas by 2040, for example, hot water systems will need to be retrofitted in as many as 5,000 homes each and every week.

As things stand, she says Australia’s building sector does not have the skills which are needed to handle a task of that magnitude.

Above all, Zorbas says the report encourages political leasers to consider emissions reduction opportunities across the economy.

Too often, he says the debate around climate change is pitched as ‘coal versus renewables’ and is focused largely upon the energy sector.

“Buildings account for more than 50 per cent of Australia’s electricity use and 23 per cent of all emissions,” Zorbas said.

“The companies that make up the Australian property sector are global leaders in sustainability, which means we are incredibly well positioned to deliver high-impact and yet cost-effective ways to help achieve the nation’s net zero goals.

“All we need is the right policy settings to guide that effort. Smart policies should be front and centre for decision-makers seeking to reduce Australia’s emissions.”

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