Advantage of Buying a New Home
Advantage of Buying A New Home
There may be a number of reasons why buying a new home is better than buying an existing home.
Yet one the one Advantage of Buying a New Home stands out above the rest….Energy-Efficiency!
The second reason is that nobody lived in the brand New Home before you. That by itself is a positive point. Especially in the current situation with the coronavirus situation!
Before you dig too deep into the home buying process, it may be wise to take note of a few Home Buying Tips.
Advantage of Buying a New Home
The number one advantage of buying a new home is the Energy Efficiency rating! Want to save on your utility bill and rather live in a home with great Energy Efficiency Rating? Click HERE to find out how.
New Research on energy-efficient housing
According to the University of Melbourne, “New research finds that people are willing to pay more for energy-efficient housing”
The research shows that buyers and renters are also prepared to pay a premium for energy efficiency.
In other words, whether you are an owner-occupier who wants to buy a new home or an investor, you will have an advantage, since your new home will have at least a 6 Star energy rating. That is what is under the building code.
Nicole Engwirda from the University of Melbourne wrote: ‘A new study has analysed tens of thousands of property transactions over five years from 2011-16 in the Australian Capital Territory, where it is mandatory to disclose the energy efficiency rating (EER) when selling a home.
The analysis, which factored in other characteristics that drive pricing, found that generally the higher the rating, the higher the price or rent.
University of Melbourne property researcher Dr. Georgia Warren-Myers says the results are evidence EERs carry weight with buyers and renters and provide a clear market signal for builders and owners to install more energy-efficient systems.
“By providing a mandatory disclosure program Australia wide, decision-making by owners, occupiers and landlords will drive more energy-efficient dwellings, potentially reducing carbon emissions associated with housing,” says Dr. Warren-Myers, who conducted the research with the University of Cambridge visiting fellow Dr. Franz Fuerst.
Generally, they found prices rise as the star rating increases. Compared with three-star properties, properties rated five and six attracted sale premiums of 2 and 2.4 percent respectively. But properties that went further on energy efficiency to gain a seven-star rating attracted heftier premiums of up to 9.4 percent.
Mandatory Energy Star Rating
The ACT is the only Australian State or Territory to introduce mandatory rating disclosure for all dwellings, while nationally only new dwellings need a rating – a minimum six-star rating out of a possible 10. In the ACT these ratings must be displayed during any sales process and there are fines for breaches. The system is limited in the rental market, where Dr. Warren-Myers points to loopholes that mean landlords can, and do, avoid disclosing an EER – such as not obtaining a rating to disclose.
People do value Energy Efficiency
“The data shows people are valuing energy efficiency and making decisions based on the energy efficiency portrayed in these ratings. It has become one of the factors that people consider when they’re looking. They see the number of bedrooms, the number of bathrooms, carparks – and they see the energy star rating,” she says.
Dr. Warren-Myers says the jump in prices for seven-star properties suggests homeowners recognise the value of going above the minimum six-star standard for new homes.
“Homeowners know that new homes meet a minimum six-star level, and want to be better than the standard,” she says. “They’re going to that seven-star mark to differentiate themselves from that baseline.
Interestingly, properties with eight stars only earned a 2.8 percent premium, which she says may reflect the small sample size. Only 0.3 percent of the 31,000 sold properties covered in the study had eight-star ratings.
At the bottom end of the ratings, zero-star and one-star rated properties sold at a 2.8 and 2.4 percent discount to three-star rated properties.
In the Rental Market
Five and six-star properties rented at a 3.5 and 3.6 percent premium respectively compared to three-star properties. However, the gains flattened at seven and eight stars with premiums of 2.6 percent and 3.5 percent respectively.
But because of the loopholes in the legislation, more than half the 67,600 rental properties analysed in the study hadn’t disclosed an efficiency rating. And it is likely to be low rated properties that don’t have an energy rating, says Dr. Warren-Myers.
For tenants, who have limited capacity to make changes to a property, it means having less information to make rental decisions and the potential to be stuck with a ‘lemon’.
“They can effectively be penalised, from the perspective of household bills, but also because they may end up still paying a standard rental price for a property that doesn’t actually perform,” says Dr. Warren-Myers.
She says this lack of transparency needs to be addressed by closing the current loopholes on rental properties in the ACT. More broadly, Dr. Warren-Myers argues, the results in the ACT support the rollout of a rating disclosure system nationally as a way to encourage a broader take up of energy efficiency in existing properties, particularly in the rental market where landlords lack incentives. This is because tenants, rather than landlords, have to pay for energy costs.
But as this research demonstrates, a boost in rental income and resale value can be offset against the initial outlay of an energy efficiency upgrade.
“If we want to really drive energy efficiency in homes and have a better product in the market, we need to look at applying this Australia-wide,” says Dr. Warren-Myers.
“In the new construction sector, under the building code, we have a mandatory minimum requirement, which is a six-star home. But there is nothing that existing homeowners, in the rest of Australia, can actually do to understand what the energy efficiency of their home is at this point in time.”
“We already have a national rating system mandatory at the new build level. By applying that to the rest of Australia for existing buildings, at least we can start comparing all buildings on the same basis.”’
It is all good to say that energy efficiency should be applied to older buildings. However, the cost may be significant higher. It is way better to rather buy a new home and be sure that it has already the minimum requirement of a 6 Star energy rating.
If you are interested in buying a home with at least a 6-star energy rating, then look no further. We can now offer you a home with even a 7-star energy rating.
Imagine the savings on your power bill….
To take advantage of this offer, Click HERE to Apply.