The research examined the role of energy efficiency initiatives on overall residential property value and explored the ability of residential valuation professionals to incorporate energy efficiency into the valuation process, focusing on their use of currently available tools.
In the context of curbing greenhouse gas emissions through energy efficiency, passive and active energy-efficient design needs to be reflected in residential property values. This enables investment and affects the availability of finance for added energy efficiency options in new and existing housing.
While the Nationwide Housing Energy Rating Scheme (NatHERS) rating tool is available as an indication of energy efficiency in new homes, survey respondents’ (valuers) knowledge of NatHERS was very limited. Our research indicated that energy efficiency features were considered to have a minimal contributory effect on assessments of market value by the valuers surveyed.
The research identified that there are limited means available to a valuer when he or she considers applying a premium or discount that reflects energy efficiency initiatives, or the lack thereof, in a dwelling. Affirming the findings of other Australian and international studies, our research suggests that mandatory disclosure and certification are essential if energy efficiency is to be considered in residential valuation. Mandatory disclosure of energy efficiency directly indicates its importance in the home, creating an additional factor for consumer consideration. Mounting evidence signals a stronger relationship between energy efficiency in the home and market value.