How does an energy efficient home affect property value?
In recent years, energy-efficient homes have become more popular among Australian home buyers, sellers, and investors. According to Domain's 2025 Sustainability in Property report, approximately half the properties sold this year were green homes or homes with energy-efficient features.
Investors are increasingly turning to green homes because of growing buyer demand and potentially better returns. But why are green homes garnering higher property values? It's a mix of supply, demand, and liveability. Here's a more detailed look at how green home features affect prices:
Higher demand for energy-efficient homes
Properties with listed green features, such as solar panels and north-facing, are garnering more attention from buyers and seem to be selling more quickly than those without. Recently, homes marketed as ‘eco’ are gaining in popularity, becoming the most frequently used keyword for energy-efficient homes.
There's a growing trend of buyers not only preferring green homes but also actively looking for homes with sustainable and energy-efficient amenities. Almost half of the homes listed now have at least one energy-efficient characteristic on their property listing.
The increasing popularity of green homes can be attributed to the heightened environmental consciousness of the average Australian. Amidst climate change, more people want to switch to a more energy-efficient lifestyle.
In addition to eco-friendly purposes, more homebuyers want energy-efficient homes because of the low maintenance and utility costs. Homeowners may find green home features such as heat recovery ventilation, solar panels, and rainwater tanks help reduce ongoing energy and water costs, making the property more cost-effective over time.
Statistics for energy-efficient houses
The data below from the 2025 Sustainability in Property report shows an increase in listing views for energy-efficient houses across all combined capitals and regions. This is consistent with growing interest from buyers of greener alternatives or sustainable features.
| Location | Days on Market | Listing Views |
|---|---|---|
| Sydney | 0 | 25.8% |
| Melbourne | 0 | 36.3% |
| Brisbane | 0 | 19.9% |
| Adelaide | 0 | 0.3% |
| Perth | 0 | 15.8% |
| Canberra | 0 | -2.6% |
| Hobart | 1 | 1.3% |
| Darwin | - | 23.3% |
| Combined Capitals | -1 | 16.1% |
| Combined Regions | -1 | 9.4% |
| Australia | 0 | 13.8% |
Statistics for energy-efficient units
Generally, energy-efficient units don't perform as well as energy-efficient houses, but they still garner better listing views overall compared to non-energy-efficient units. Although listing views vary in percentage, the days spent on the market are consistent across all combined capitals and combined regionals.
| Location | Days on Market | Listing Views |
|---|---|---|
| Sydney | 0 | 38.2% |
| Melbourne | 0 | 13.9% |
| Brisbane | 1 | 9.7% |
| Adelaide | 0 | -1.6% |
| Perth | 1 | -7.5% |
| Canberra | -7 | 2.1% |
| Hobart | - | -4.1% |
| Darwin | - | - |
| Combined Capitals | 1 | 3.6% |
| Combined Regions | 2.5 | 9.3% |
| Australia | 0 | 6.5% |
Buyers are willing to pay more for green homes
Those looking for green homes are usually willing to pay the premium. Energy-efficient home buyers also often act swiftly to get the energy-efficient property they want. Investors are more motivated to adopt sustainable home features not only because of the environmental benefits but also due to potential financial gains.
Energy-efficient units seem to outperform energy-efficient houses; however, this may be due to the difference in buyer demographics. Because houses are more expensive in general, some buyers may not be able to afford the premium, especially if it's their first home.
Price premiums for energy-efficient properties
According to Domain’s latest sustainability report, energy-efficient homes have a price premium. Energy-efficient homes are valued at around 14.5% more for houses ($118,000) and 12% more ($75,000) for units, compared to their non-energy-efficient counterparts.
Throughout the years, the price premium for energy-efficient homes has fluctuated. Energy-efficient house premiums peaked in 2022 at 17.2% while energy-efficient unit premium prices saw their highest in 2023 at 14.7%.
The lowering premiums can be attributed to the weaker buying power of homebuyers, higher purchase prices, and affordability constraints. However, despite the challenges, there remains a strong demand for energy-efficient homes and features, as the price difference for energy-efficient homes has increased compared to last year.
| State | Suburb | Energy-efficient House Price | Energy-efficient Price Premium |
|---|---|---|---|
| NSW | Broken Hill | $298,000 | 75.3% |
| NSW | Inverell | $470,000 | 34.3% |
| NSW | Woonona | $1,361,000 | 25.4% |
| QLD | Calamvale | $1,025,500 | 41.5% |
| QLD | Carseldine | $1,060,000 | 36.8% |
| QLD | Robina | $1,360,000 | 35.3% |
| SA | Port Pirie | $364,500 | 35.0% |
| SA | Greenwith | $970,000 | 30.6% |
| SA | Prospect | $1,277,500 | 20.0% |
| TAS | Devonport | $530,000 | 13.6% |
| TAS | Glenorchy | $560,000 | 10.0% |
| TAS | Howrah | $785,000 | 8.2% |
| VIC | South Yarra | $2,285,000 | 54.8% |
| VIC | Kew | $2,620,000 | 34.4% |
| VIC | Hawthorn | $2,600,000 | 32.8% |
| WA | Collie | $450,000 | 23.3% |
| WA | Mount Pleasant | $1,960,000 | 22.5% |
| WA | Balcatta | $790,000 | 22.0% |
Top suburbs with high energy-efficient house price premiums
Some suburbs have higher energy-efficient price premiums than others. If you are considering investing in energy-efficient properties, research and review where energy-efficient homes can garner the most value increase.
It's also important to consider the kind of energy-efficient properties on the market. Some properties can be considered luxury properties, which will have more inherent value compared to a standard single-family home.
| State | Suburb | Energy-efficient House Price | Energy-efficient Price Premium |
|---|---|---|---|
| NSW | Broken Hill | $298,000 | 75.3% |
| NSW | Inverell | $470,000 | 34.3% |
| NSW | Woonona | $1,361,000 | 25.4% |
| QLD | Calamvale | $1,025,500 | 41.5% |
| QLD | Carseldine | $1,060,000 | 36.8% |
| QLD | Robina | $1,360,000 | 35.3% |
| SA | Port Pirie | $364,500 | 35.0% |
| SA | Greenwith | $970,000 | 30.6% |
| SA | Prospect | $1,277,500 | 20.0% |
| TAS | Devonport | $530,000 | 13.6% |
| TAS | Glenorchy | $560,000 | 10.0% |
| TAS | Howrah | $785,000 | 8.2% |
| VIC | South Yarra | $2,285,000 | 54.8% |
| VIC | Kew | $2,620,000 | 34.4% |
| VIC | Hawthorn | $2,600,000 | 32.8% |
| WA | Collie | $450,000 | 23.3% |
| WA | Mount Pleasant | $1,960,000 | 22.5% |
| WA | Balcatta | $790,000 | 22.0% |
Added value due to choice of green features
Installing sought-after features in established properties is a long-term strategy to increase a property's value. With energy-efficient features, however, home sellers and investors could tap into the green home market and attract a wider range of buyers and tenants.
Solar panels, including solar water heaters and solar electricity generation outfits, are among the most popular/commonly installed energy-efficient features. In the past year alone, 37.6% of sold houses have solar installations.
If you're an investor looking to capitalise on the green home market, adding something as simple as solar panels could potentially increase the value of your property. You can take advantage of solar home loans and get discounted rates so you can upgrade your property sooner.
Another impressive value-adding energy-efficient feature is double-glazed windows. Double-glazed windows are effective insulators while also reducing noise and lowering heating and cooling costs. Properties with double-glazed windows have reportedly sold at higher prices in some markets, but the premiums vary significantly by location.
Age and location of the property
Relatively speaking, green homes are new inventions. Energy-efficient homes are typically newer and therefore have more modern aesthetic features. If an established home is being renovated to include energy-efficient features, the exterior will likely also be improved to look less dated. Enhancing the aesthetic appeal of the property may also increase its property value.
Regardless of amenities, age, and overall demand in Australia, the value of energy-efficient homes still relies on the local real estate market. As an investor, it's best to study the local market trends to gauge profitability. It may be a good idea to look for areas with a low supply of green homes but high demand and fill in that niche. Understand where green home options are abundant so you can create an appropriate strategy.
Financing your energy-efficient home construction or renovation
At loans.com.au, you can find competitive rates and incredible loan features so you can get your energy-efficient home sooner.
Disclaimer: The information provided in this article is general in nature and does not constitute financial or legal advice. Please seek professional advice tailored to your circumstances before making any financial decisions.
About the article
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.
