Are your vendors looking at upgrading their home before putting it up for sale? An energy-efficient renovation, with an eye on the future, can help them attract a wider pool of buyers, while also maximising the value of their home.
In this guide, we’ll look at evidence that energy-efficient homes tend to sell for more, what are some on-demand features, and how to market a ‘green home’. Here’s what experts* say.
How much energy do NZ homes consume?
According to BRANZ data, New Zealand homes consume 10,500 kWh of energy per year on average, of which 7,200 kWh is electricity (with the amount ranging between 5,800 and 8,500 kWh depending on the location).
The good news is that the amount of electricity used per capita is continuing to decline. Between 2009 and 2019, residential electricity consumption dropped by 15% – faster than other OECD countries. So before the 2020 and 2021 lockdowns saw people spend more time at home, and consumption increase again, the trend was encouraging.
It goes to highlight that energy-efficient appliances and building features contribute to a greener environment. And as we’ll see shortly, they also help boost property values.
Do ‘green homes’ sell for more?
Statistics are unequivocal: energy-efficient homes are in high demand due to improved comfort and smaller energy bills – and they typically fetch higher prices.
According to an interesting study by the University of Wollongong, Australia, green homes typically attract a 5% to 10% price premium compared to comparable, less efficient homes. Researchers reviewed reported prices around the world, and found that the price premium varied by country and real estate market: from +27% in Northern Ireland to 2.7% in the Netherlands. While we couldn’t find local data, across the ditch Australian 2018 figures showed potential price premiums of 2.4%-9.4%, and faster selling times, depending on the level of energy efficiency achieved.
Popular green features
Defining energy efficiency is not as easy as it may sound: there’s a lot to the concept, but generally speaking, it’s anything that helps reduce power bills, protect the environment, and manage the demand for energy.
Energy-efficient lighting and appliances can already make a difference, but much more can be achieved with a green home design or a comprehensive remodel. Here are some ideas your vendors might like to consider:
· Insulation – The Energy Efficiency and Conservation Authority (EECA) recommends starting with ceiling insulation first, as it’s usually the most affordable and effective insulation to install. Then, they can look into underfloor and wall insulation.
· Carpet – Quality carpet can be an excellent insulator within the home: according to experts, uninsulated hard flooring can cause a heat loss upwards of 10 per cent.
· Double glazing – Double glazing can be expensive, but it’s also a sought-after feature. And depending on the configuration of your vendor’s existing home, they might be able to instal retrofit double glazing for a fraction of the cost.
· Heat pump and central heating – Provided the heat pump is sized correctly for the space, it can be an efficient way to warm up the home, and something buyers may appreciate having. Alternatively, your buyers may also investigate central ducted heating systems, with a programmable thermostat. As we noted in a previous article, many people returning from overseas are looking for heating and insulation in their New Zealand homes.
· HRV – Good ventilation is key to achieving energy efficiency through the property, as it helps reduce the cost of heating and minimise energy loss.
· Solar panels – If the home is in a sunny spot, solar panels can be an option. However, it may not be suitable for everyone, and there are many factors to consider when weighing costs and benefits.
These are just some common features that buyers may be looking for in their next home. And the good news is, we can help your vendors’ property stand out, by providing the funds to make their renovation happen. Click here to find out more about your ‘Renovate Now, Pay Later’ finance tool.
Selling an energy-saving home
One of the key factors in selling energy-saving homes is the certification. Here in New Zealand, there are several building rating schemes and tools available, each issuing their own certificates. The most common ones are:
· Homestar™, a NZ home rating and advisory tool that’s applicable to both new and existing homes, and helps people assess the value of their homes based on key indicators of warmth, health and resource performance. Ratings range from 0 (lowest rating) to 10 stars (highest).
· HomeFit was developed by the New Zealand Green Building Council with industry input. The service assesses the health, energy efficiency, safety, and comfort of homes that have been lived in for some time, so it’s not suitable for new builds. And if the property meets certain requirements, it can get the HomeFit stamp, or the HomeFit Plus rating if they achieve a higher level of performance. To get started, your vendors can use the HomeFit Online Check today.
Besides certifications, if the property is energy-efficient, it’s a good idea to ensure all green assets are listed, including insulation, double-glazing, cooling, and heating features. If possible, providing an energy-savings overview with annual cost projections is a plus. As a real estate professional, you can be the bridge between the buyers and the energy information they’re looking for.
In a nutshell, a premium real estate marketing campaign can make the property stand out to environmentally-conscious buyers, and help your vendors get top dollar from the sale. Once again, we can help: check out our ‘Advertise Now, Pay Later’ finance option to learn how we can fund the marketing of your clients’ home.
Contact the team at Lifestyle Finance
Like to know more about our finance solutions? Click here to contact us today, call us on 0800 100 265 or send us an email at info@lifestylefinance.co.nz.
*Sources:
Your Home and Garden | Conserve Energy Future | Wired | Cielo | HomeSelfe | EEBA | Builder Base | NZ Business Council for Sustainable Development | NAR | The Conversation.com | BRANZ | HouseAce
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance