With electricity prices expected to soar in Australia over the coming years, improving your property value is just one more motivation to take up eco renovating.
How much value it will add depends on a number of factors, of course. While prospective buyers could be willing to pay more for a property that uses energy wisely, just how much more depends on price range, location and features.
After all, a harbour view could add millions of dollars but installing one energy-efficient light bulb may not add one cent.
A report by the Australian Bureau of Statistics studied sale prices and eco star ratings in the Australian Capital Territory – it found that if you’ve got two houses on the market that are pretty much the same except for their energy ratings, the house with the higher energy efficiency rating will command a higher price.
The study found that for a house worth $365,000, increasing the rating by half a star would add, on average, nearly $4500 to its price.
What buyers want
Would you pay more for an energy-efficient house or one that was water-wise? Real-estate website Domain polled their users and 62 percent said they wanted the house they were buying to be eco-friendly.
Almost one-third of respondents said, “yes, absolutely: I would only buy a house that is designed to have minimal impact on the environment”. While the largest group of respondents (35 percent) said some energy efficient measures installed in a home would be ideal.
Just 12 percent said green wasn’t a factor in their home-buying decision, “no, not at all: it’s hard enough to find the right property without considering a property’s eco-rating”.
Selling agent, Adam Hawkins, of Ray White Aspley in Queensland said eco additions have made it to the top of buyers’ lists.
“It’s something that is being more and more questioned and it’s advantageous (for owners) to comply,” he told News Ltd.
“I’m definitely seeing more people steer towards it. And it’s a good selling point that I have used.”
Finding the green to go green
Renovating a house or unit to improve its eco rating can bring great reward, but first you need to find the money first.
Of course the best way to fund any renovation is through your savings – that way you won’t pay interest on the work you do, which makes your profit margin all the sweeter. But it could take you around three years to save a renovation kitty of, say, $25,000 if you put away $150 a week in an online saving account.
An easier and faster way may be to redraw any equity out of your home loan. But take care because borrowing an extra $25,000 on your mortgage may only increase your repayments by about $45 per week but over 25 years that can add $40,000 to your total interest bill.
Before you make any green investment, do your homework and work out the costs. Also, talk to real estate agents in the area to gauge which eco additions are a worthwhile investment. They should be able to guide you in the right direction and help you to avoid overcapitalising on your home.