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As costs rise, Aussies are demanding energy-efficient buildings

You heard it here first. Australian consumers are demanding energy efficiency in new buildings – and ignoring this trend could be dangerous for the building industry.

It seems that homebuyers and tenants are wising up to the fact that energy-efficient buildings will save them money. Choice Australia, who speak to a vast consumer audience throughout the country, have just produced a Guide to energy-efficient homes that save money. This is aimed not just at homebuyers but renters – meaning investors will be sitting up and taking notice too.

Melbourne developer Nightingale Housing cannot meet the demand for their top of the range, energy-efficient apartments. In December last year, the company had 3700 buyers waitlisted for their Melbourne developments, at a time when appetite for traditional apartment developments is on the wane. And their model of dense, super-energy-efficient design is moving out from capital cities, with the latest development slated for the regional town of Bendigo.

It’s not hard to see that conditions are changing in Australia. The financial pressure’s on, with signs everywhere that times are getting tougher in the Aussie economy. House prices are weakening. The banking and financial planning investigations have revealed weaknesses in some of our biggest financial institutions. The Reserve Bank is hinting interest rate rises are on the horizon, putting the squeeze on those who borrowed large mortgages when rates were at historic lows.

Combine that with uncertainty in the Australian export markets that have contributed to years of prosperity, with tensions with China possibly reducing demand for our raw materials, and it’s obvious there’s pressures looming on household budgets from all directions.

At the same time, cost of living pressures are starting to bite. Households are grappling with soaring rents and low wage growth. Many will struggle to make ends meet in retirement. This particularly affects low-income households and renters.

The price of energy is a significant contributor to these runaway costs. Australia’s energy infrastructure is ageing, which means big expenses are anticipated to replace the wires, relay stations and power stations that make up our energy grid. Power bills are generally going one way, and that’s up.

To add to this, we’ve signed up to the Paris climate agreement, which obliges us to deliver net zero emissions by 2050.

More than half of Aussie buildings that will be standing in 2050 are not much more than a glint in a developer’s eye right now. However, almost 60 per cent of homes standing in 2050 will be built after 2019.

The Australian Sustainable Built Environment Council (ASBEC)’s report The Bottom Line, produced in partnership with ClimateWorks Australia, has crunched the numbers to show that implementing stronger energy efficiency measures for new buildings could save every household $150 a year.

That means that we have a golden opportunity right now. We can lock in bad performance and high costs, along with alienating potential customers, or we can safeguard future sales by acting to insist on good performance and lower costs. From air tightness to roof insulation, we already have the know-how – and much of it is super simple!

But we can’t get the strongest performance for our buildings without government leadership. Governments set the rules that govern the minimum energy performance standards for our buildings, through the National Construction Code and other state and local codes such as planning rules.

In the absence of federal leadership, states, territories and local councils could go it alone, but strong leadership from the federal government is the best mechanism to improve performance quickly. Making energy saving features mandatory, or providing incentives to include them, can drive down the price of technology as it allows economies of scale.

With consumers already demanding these measures, it won’t be long before they abandon those who fail to deliver them. This could mean declining sales for industry players who lag behind. Equally, it could see governments who fail to act on the policy that delivers energy efficiency punished at the ballot box.

Australians are increasingly making it clear that they expect higher performing buildings. Industry and governments will ignore them at their own peril.

Suzanne Toumbourou is executive director of the Australian Sustainable Built Environment Council.

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