None of the methods needed to transform the energy efficiency and comfort of our homes is radical, but together, the result would be transformative.
Autumn is the season that reveals how homes actually perform.
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In summer or winter, heaters and airconditioners can mask poor building design. But in autumn, when warm days give way to cold nights, homes that lack insulation, draught sealing and shading quickly expose their weaknesses.
Poorly performing homes heat up too quickly during the day and lose warmth fast overnight. This instability affects more than just comfort. It disrupts sleep, contributes to respiratory illness, increases stress and pushes households to rely heavily on energy systems during peak demand hours. Research shows these same housing failures also amplify air quality risks and drive higher insurance costs as climate impacts intensify.
An upgraded home behaves very differently. By slowing the movement of heat, they maintain more stable indoor temperatures even as conditions outside fluctuate. This stability does not depend on expensive technology. It comes from basic building elements such as insulation, airtightness, appropriate glazing, shading and efficient electric heating and cooling.
Yet most Australian homes are missing some or all of these features.
Around 70 per cent of Australia’s 11 million homes are low performing, and around five million remain connected to fossil gas, particularly in southern states. That combination is expensive for households today and risks locking in higher costs as Australia decarbonises its energy systems.
What climate targets say about homes, not just power stations
Public discussion of climate action commonly focuses on energy supply, renewable generation and electric vehicles. These are essential, but they aren’t the full picture.
Climate modelling consistently shows that homes themselves must change if Australia is to meet its emissions targets at the lowest overall cost.
New analysis based on a well-below-2C pathway shows that by 2035, Australia needs to upgrade millions of homes. Research makes clear – the more comprehensive the upgrades, the fewer homes need to be upgraded:
- About 2.08 million homes require electrification of space heating, hot water heating, and cooktops, as well as upgrades to walls, windows and ceilings, as per image 1 and 2
About 2.44 million homes require upgrading if walls, windows and ceilings are included, along with the electrification of some appliances, such as space heating and cooling
- If apartments and townhouses are prioritised, about 3.14 million homes would need quick fix upgrades and electrification of space conditioning, cooking and hot water
These figures represent different strategic pathways to the same outcome. They are not competing totals.
The message is consistent across all scenarios: There is no credible climate pathway that avoids large scale upgrades to existing homes.
Improving homes cuts emissions in two ways. It reduces the amount of energy needed to heat and cool buildings, and it allows electrification to operate efficiently on a grid increasingly powered by renewables.
The International Energy Agency reaches the same conclusion from an energy security perspective. With new energy supply often taking years to deliver, the IEA finds demand side measures such as insulation, draught sealing, efficient electric heating and electrified cooking reduce households’ exposure to price and supply shocks much more quickly. Unlike subsidies or emergency interventions, these measures permanently lower the energy demand, protecting households from day one.
Homes are frontline energy infrastructure
Home upgrades are often framed as private renovations. In reality, they are system level infrastructure investments.
Poorly performing homes drive peak electricity demand. This is when many households switch on heating or cooling at the same time. These evening peaks are expensive to meet and place the greatest strain on energy infrastructure.
Upgrades to walls, ceilings and windows can significantly reduce peak demand. Insulated and airtight homes stay cooler longer during heatwaves and retain warmth through cold nights, reducing the need for appliances to run simultaneously across the grid. As a result, network costs fall, reliability improves and the risk of outages during extreme weather declines.
Homes are not passive energy users. They are frontline energy assets.
Apartments and townhouses are hiding in plain sight
Detached houses dominate the conversation about home upgrades but apartments and townhouses offer some of the fastest opportunities to cut emissions at scale.
Because they share walls, floors and roofs, these dwellings often require fewer materials per home to achieve meaningful improvements. Measures such as ceiling insulation, draught sealing and efficient electric appliances can deliver large benefits at relatively low cost.
Prioritising apartments and townhouses could mean upgrading the equivalent of around 3.14 million homes by 2035, while supporting renters and lower income households who are more likely to live in these building types.
As denser housing becomes more common, ensuring these homes perform well is essential to preventing future energy hardship.
The slow burn risk of gas dependent homes
Around 5 million Australian homes remain connected to gas, even as electrification gathers pace.
The IEA warns that reliance on oil and gas based fuels leaves households exposed to supply disruptions and price volatility beyond any single government’s control.
As higher income households leave gas networks first, those who remain face rising network charges as fixed costs are spread across a shrinking customer base.
Without coordination, this risks a disorderly exit that places the greatest burden on renters and low income households with the least ability to switch. Upgrades to walls, ceilings and windows, and electrification must proceed together, particularly for households experiencing energy poverty.
Efficient electric systems perform poorly in leaky homes, while unmanaged withdrawal from gas networks increases inequality, system costs and energy bills, and political risk.
Some Australian states, including Victoria, have already phased out new gas connections. Without national coordination, Australia risks a fragmentation transition rather than an orderly phase out that protects households and limits costs.
Why renters and vulnerable households matter for scale
This is not only an equity issue. It is a scale issue.
The worst performing homes are disproportionately occupied by renters, people on low incomes, First Nations households and residents of social and community housing. These households face high energy costs or unsafe housing conditions, but have limited agency to act.
The IEA is clear that blanket subsidies and price caps are expensive, difficult to unwind and often poorly targeted. By contrast, targeted efficiency upgrades permanently reduce exposure to future price shocks and deliver lasting bill relief to those most at risk.
Starting with the least efficient homes this achieves the greatest gains, socially and economically. It also helps build the skilled workforce and supply chains needed for a broader national renovation effort.
| State | Apartment | Townhouse | Detached House |
| VIC | 262,356 | 295,734 | |
| NSW | 530,578 | 307,785 | |
| WA | 59,801 | 128,527 | 935,865 |
| SA | 44,795 | 94,923 | |
| ACT | 22,568 | 24,440 | |
| QLD | 209,747 | 176,358 | |
| TAS | 12,074 | 11,871 | |
| NT | 13,259 | 8,771 | |
| Australia | 1,155,179 | 1,048,410 | 935,865 |
Building codes must not lock in tomorrow’s problem
Australia is in the midst of a major housing construction push. This should be an opportunity to avoid repeating past mistakes.
Weak or delayed energy performance standards lock in inefficient, gas dependent homes that will require retrofits later at far greater cost. Stronger standards spread costs over time and protect households for decades.
Homes built today will still be standing through multiple price shocks and climate extremes. Ensuring they need less energy is a form of long term risk prevention.
What a renovation wave actually requires
Upgrading millions of homes sounds daunting. Australia has done similar transformations before.
Rooftop solar went from niche to mainstream within two decades because policy aligned standards, finance, workforce development and consumer trust.
A successful renovation wave requires the same foundations:
- Clear, nationally consistent minimum standards, especially for rentals
- Mandatory disclosure of home energy performance
- Accessible finance for households and housing providers – to uplift homes to efficient, all electric houses
- Long term workforce and supply chain investment
- Targeted public funding where markets do not deliver
None of these measures is radical. Together, they are transformative.
The choice Australia faces
Autumn’s temperature swings offer a glimpse of what lies ahead: more volatile weather, higher peak demand and greater energy stress.
Australia can respond by reducing the problem at its source by fixing the homes themselves.
Climate modelling shows 2-3 million homes must be upgraded in the next decade to remain on a credible pathway. Without efficient, electrified homes, households will remain exposed to ongoing energy shocks beyond governments’ control.
Autumn is telling us what winter and summer will make unavoidable.
