The Value of Building Green

As we look to the future, the construction of homes that can withstand and adapt to the challenges of tomorrow becomes imperative. With the global community aiming for net-zero emissions by 2050, the Australian home building sector is at the forefront of addressing some of the most significant challenges of our time.  

By 2030, Australia's population is projected to exceed 31 million, necessitating the construction of approximately 1.18 million homes—or 197,000 annually—to accommodate this growth. Given that residential buildings contribute over 13% to the nation's greenhouse gas emissions, the architectural and communal planning of these homes will play a pivotal role in determining the environmental health of our planet.

Incorporating sustainable technologies and infrastructures into home design not only reduces the energy required for heating and cooling but also enhances living comfort and resilience against extreme weather conditions. Moreover, the shift towards sustainable housing is poised to be a significant catalyst for economic expansion. Projections indicate that transitioning to eco-friendly housing could result in an investment surge exceeding half a billion dollars by 2030, alongside the creation of over 10,000 new jobs. For homeowners, the benefits are twofold: immediate savings on annual energy bills and long-term, robust investment returns.

However, this transition is not without its hurdles. Consumer confidence, supply chains, building business models and financing all contribute to a slow shift to the future.

As Australia continues to evolve and move towards a greener future, underscoring the mutual benefits for consumers and the broader economy is key to accelerating this transition. Emphasising the tangible returns of adopting such practices can not only enhance individual lives but ensure a stronger economy and most importantly planet.  

The Consumer

Australian homeowners face some of the most expensive energy bills in the world, with up to 85% of Australians experiencing “bills shock” through 2020. Analysis by the Climate Council (2022) shows significant savings for households. For example, a 7-Star house built in any capital city would deliver average heating and cooling cost savings of $450 every year (between $119 and $945). Over the life of a house, these savings would run into tens of thousands of dollars and pay back any potential upfront costs in building a more energy efficient home.

Furthermore, research shows that Australians want sustainable homes. Comfort, affordability and health are all leading drivers in the housing market. Research has confirmed that homes featuring strong design attributes, such as solar panels and high environmental ratings attract premium pricing. Research by CSIRO indicates an 8.6% average higher purchase price for housing with sustainable features. Furthermore, the market share is greater, with two thirds of home buyers preferring energy efficient homes.  

The Supply Chain

Home builders are at the frontline of sustainable construction, whether it is in new buildings or major renovations. Volume builders, who construct 40% of new homes, have huge potential for innovation and commercial gain. Whilst consumers have limited choices, the residential construction industry can shift from a cost burden to a market opportunity. Research undertaken by the HIA found that every $1 million of construction output creates nine construction jobs, seven additional jobs to supply chains and a further $2.9 million in economic value across the economy. Consumer sentiment and a growing desire for affordable, sustainable solutions can then lead to greater return on investment.  

The Economy

Whilst the Australian Building Code Board has strengthened the energy efficiency provisions through the NCC with the upgrade to 7 star energy rating regulations, there is still further work and an untapped market that the Australian economy can benefit from. Any delay in introducing new standards will lock in higher bills and emissions. An independent analysis from Australian Sustainable Built Environment Council and ClimateWorks (2018) found that a delay in implementing new standards could mean 1.1 million homes (including townhouses and apartments) will be built to a poorer standard; adding $2 billion to residential energy bills and $720 million in additional network costs. Apart from the clear climate imperative, there is also a significant market for sustainable homes and economic opportunity. Research and economic modelling undertaken by ASBEC and CSIRO has found that investing voluntary measures to accelerate Australia's transition to sustainable homes by 2030 would:

·         Deliver more than half a billion dollars of extra investment in the construction industry  

·         Create over 7000 new jobs  

·         Save over $600,000 million in energy bills  

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