NEWS FROM THE FRONT DESK: It’s time to set the record straight. The National Construction Code is on its way and yes, 7-star NatHERS rating is still on the cards, despite recent claims to the contrary. Of course it should be even higher, given the price of energy right now and our galloping climate catastrophes.

The result of the recent election was clear and unequivocal. Australians want action on climate change. The time has come for sustainable and affordable homes.

And with soaring fossil fuel prices creating a cost of living crisis, building energy efficient homes has never been more important, or urgent.

That’s not just the mood in the general public, it’s also the mood in the industry as well. (Well, at least the parts of it that are respectable and not trying to pull the wool over our eyes.)  

Just like King Canute, the Housing Industry Association is trying to turn back the teal tide by continuing to defend low-quality, energy inefficient houses and apartments that cost a small fortune to heat and cool.

That can be the only logical reason this lobby group is trying so hard to stymie modest proposals for a better National Construction Code by Australian Building Codes Board, which is to increase the minimum energy efficiency standard for new homes in the NCC from a 6-star to a 7-star NatHERS rating.

In a recent article, the HIA sewed mass confusion and anger in the industry by claiming the seven star proposal had been dropped. 

It claimed that “building industry ministers” had already “accepted its proposal” to “replace the planned move to a 7-star minimum NatHERS (nationwide house energy rating scheme) thermal rating” in the National Construction Code.

There is just one problem. 

It’s not true.

Here’s what Australian Building Codes Board chief executive Gary Rake told The Fifth Estate:

“That’s not accurate. Seven Star is still the proposal that we’re evaluating.”

Here’s what’s actually happening with the NCC

The Fifth Estate understands that Mr Rake briefed building ministers at the end of March on the ABCB’s progress with its analysis. 

During that meeting, Mr Rake told energy ministers that there are cost effective improvements that can be made to energy efficiency through a move to seven stars, along with the whole home energy budget.

Earlier this week, the ABCB published its interim consultation report on the proposed improvements to residential energy efficiency.

In that report, the ABCB outlines some of the feedback it has received from public submissions, grouped by theme, and gives a short response on how it’s going to deal with that topic in the next stage of its analysis. 

Once again, the introduction to that report explicitly says the ACBC is evaluating seven stars for both class one standalone buildings and class two apartments.

“Australians deserve better homes. We are absolutely delighted to hear that we are continuing a full and thorough process for NCC 2022 and look forward to continuing to engage throughout this process,” Green Building Council of Australia chief executive Davina Rooney told The Fifth Estate on Thursday.

“We’re extremely pleased that Gary Rake has provided clarification on the latest status, because it’s important that we’re all clear as policy processes progress.”

What’s left to be done on the NCC

Most of the new provisions in the NCC were published in the ABCB’s May preview. That means people can now see most of the new provisions, including the new accessible housing liveable and housing standards.

The two remaining decisions that are yet to be finalised are on energy efficiency and condensation.

At this stage, The Fifth Estate understands the ABCB currently anticipates its final advice will be presented to ministers in July, after the new federal minister sends out an invitation to colleagues.

If a ministerial decision is reached in July, it would be written into the code by 1 September. 

The other question the ABCB will work on, in partnership with the states and territories, is the transition timeframe. 

There will be a mandatory “no later than” adoption date. 

The Fifth Estate understands that ministers are aware this is a big revision of the code with major changes in accessible housing and residential energy efficiency. This will be a big factor in determining the adoption date timeline.

“We’re working with states and territories on options for transition. We obviously want to get the benefit to consumers as quickly as we can. But we need to do that at a pace that industry can safely and properly respond to,” Mr Rake said.

“Some of the important related matters for energy efficiency that ties into the development of a new NatHERS energy tool and making sure that that’s available in the market, and that work is well progressed. 

“And it’s making sure that the rest of the supply chain can be aligned. So we want to make these changes as soon as we can but at a sensible pace for industry.”

Running costs are lower at 7 stars

The HIA has also claimed that retaining a 6 star NatHERS energy standard with whole-of-house energy use in the NCC would be “more cost-effective for the builder and for the running costs of the home for the owner”.

Again, we know that’s just not true, and there’s solid, detailed economic analysis to back that up.

Even before the massive recent energy cost increases, living in a 7 star, all-electric house in any Australian capital city saves residents an average of $450 per year on their heating and cooling bills, compared to the current 6 star standard.

The savings are even greater in cities with hotter Summer climates, with Darwin and Canberra residents keeping an extra $945 and $713 in their pockets each year, respectively. 

While building a 7-star home is currently slightly more expensive upfront than a standard six-star home—an average of around $2300—that difference is repaid in less than six years.

Keep in mind that those are the prices today, without a 7-star NatHERS NCC standard in place. Economies of scale mean that once a 7-star standard becomes the norm, that upfront price difference will come down.

Now here’s the thing. Unless your surname is Musk, Gates, Buffett or Bezos, you most likely are not going to pay for your house upfront with cash. You’ll get a 30-year mortgage.

Certainly very few people who are buying a home from a HIA member are doing it without a mortgage!

A very sensible solution

Finally, if a 7-star standard will cost an extra $2300 on average (repaid over a 30-year mortgage), and saves residents an extra $450 each year, then there’s a really simple solution.

The federal government could simply step in and provide an interest free loan to residents covering the cost difference, which would be repaid by residents through energy savings. 

As one of Australia’s top energy experts, Alan Pears, pointed out back in April, such a program is very similar to what the federal government already does with the First Home Buyers Scheme.

And, frankly, pushing such a scheme would be far more productive for the HIA than spreading confusion through the newspapers.

The teal tide has rolled in. Australians deserve better homes.

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  1. The HIA represents builders that don’t want to optimise and redesign their mass-produced 6-star (or 4.5 star in QLD) designs.
    Those builders have no interest in ongoing operational cost to run the home (for the homeowner), they just want to nailgun the house together ASAP, make as much profit as they can move on to the next before it’s even checked for defects

    1. This article begs the question of the writer as to how much experience he has in the Construction Industry. As often is the case within the construction industry and I assume many others Industries that the Politicians, Bureaucrats, Manufacturers and pro Green entities all want to tell the Construction Industry how easy and affordable it is to make changes when they don’t really understand the implications of introduction of new Standards and Policy. Some points for your consideration. HIA along with others have outlined this and as such is the reason Mr Rake has taken the revised position he has with allowing the introduction to be extended out is because HIA along with many others had pointed out the implications.

    2. Robert Robinson for a number of years now Queensland has been required and has been delivering 6 Star rated homes and as such has been adopted. For your information a lot of work had to be done with Nathers when the Assessment criteria was developed as it did not work in the warmer climates some of the fundamental logic was excluded and as an example (1)It reduced the natural practical applications of when Sun should end up in side or be shaded from the walls of homes.(2) The benefits of cross flow ventilation were negated. For your consideration can i suggest the most logical and has not been considered at all is the setback requirements be given a massive overhaul but clearly this won’t happen because between State & Local Gov’t and then the Greenfield Developers it is to hard for them and easier to kick the can down the road. While we are not operating in the Project Builder Market as it is very competitive and low margin unlike the Greenfield Developer market. For your consideration standardization of block sizes and dimensions with setbacks set to optimize best aspect would go a long way to delivering a better environmental outcome. In closing this article is not a realistic look at what needs to be done it is simply an uneducated attack on an Industry Body that does a lot of Heavy lifting in our Industry

      1. We know about Queensland needing adaptations to standards for its particular climate and we know for a fact that the HIA and MBA are consistent blockages to any improved standards. When the industry adopted the last NCC update it screamed blue murder that it would ruin the market, Butit took a matter of months for the clever builders on the ground to slash costs of the upgrate to a (ver) few thousand dollars. the fact is many homes are being delivered that are not fit for purpose. If you spare a minute to check out the weather lately you will see we need better protection. You say consumers should simply take the action you need to slash their heating and cooling costs but they must rely on builders and the rest of the develo9pemnt market to deliver their product… so we should not use a lot of things destroying the planet and damaging our heatlh but generally we rely on the economic system to provide us with that choice… in housing it is not (unless you can afford a bespoke desing and build).

        Also we know that in general much new housing does not even meet the legal standard.

        1. With respect Tina.
          Unfortunately your analogy is again an example of a lack of understanding the Construction Industry. Yes HIA did push back with the last Nathers upgrade simply because it didn’t work. As an Industry Body this is part of there role in representation of the Industry they represent because the parties introducing and or administration of the standards had not done there job properly.
          As an example Green field land developers are delivering blocks of land that are not consistent in size climate aspect . Can I suggest you take some time to look at (1)One of the many band wagons HIA have been pushing now and in this case for over a decade is for a single QLD Housing Code that will allow a better result all round and deal with this issue as well as Housing Affordability, Universal Housing, Condensation and a more efficient Delivery of the end product to name a few. As an example in South East Queensland there are in excess of 200 individual plans of Development and as such the implications for the Builder, the family buying and building the home. As a result whether you are a Project Builder or a Custom Builder it is unlikely the same Energy Efficient result will be met on the same plan each time. (2)The above scenario is just some of the multiple implications that require consideration to move forward on but HIA and MBA require cooperation from Federal State and Local Gov’t. Can i suggest there is some beat up directed in that direction as opposed to kicking the can down the road to the Builder as it is currently.

          1. we hear none of this nuanced story. We hear these industry lobby groups pretend to agree in public to sustainability advances and then white ant all action behind the scenes or in representations to the ministers…we constantly hear it’s too expensive, it’s all too expensive when our clever builders soon come up with cheaper ways to deliver efficiencies and energy improvements..

            1. So Tina your position is kick the can down the road as it is all the Builders fault. There is no responsibility required from the Politicians, Bureaucrats, Product Manufacturers, Land Developers, Architects, Building Designers, Engineers etc. If these parties were prepared to address the subject professionally within there respective sector then there would not be the push back by the likes of HIA. Can I recommend you take some time to delve into the entire process and it will highlight the incompetence that as a builder has to be dealt with and not just in Energy Efficiency.

              1. Pat, I’ve spent a lot of time delving into this process.
                Well before this publication that’s nearly 14 years old, before that on the same topics at the AFR for four years and before that editing the Property Council print magazine in its heyday for another six years.
                I totally understand as you no doubt do that there is actually a huge number of industry professionals and organisations trying hard to shift to better standards.
                A huge number of participants coming together under their own banner, that of ASBEC, and the Green Building Council to create better outcomes.
                Please see if you can check out a movement on Facebook called My Efficient Electric Home. I just looked and it’s now up to 57,500 members. All discussing how to fix the energy efficiency issues perpetrated by a systemic failure to deliver sustainable comfortable houses that don’t cost the earth to live in.
                A lot of architects, engineers, builders and even developers – yes – are jumping on this huge opportunity to improve our homes. But all we get from the MBA and HIA are reasons to remain silent, unchanged.
                I know there are a few efforts to green up tradie skills, but there is a stubborn refusal to change. And yet our builders are among the cleverest, most versalile and inventive in the world, I’m often told. They can deliver code improvements at next to no additional cost if given a bit of time.
                Why is their professional organisations trying to send them back to the stone age?
                Sounds like we need a good chat. Are you open to a public online debate about this? I can gather a few people on each side of the fence and find out if we unfair about builders as you suggest (not ALL builders trust us, Check out the work of the leaders… amazing ) and what we need to do to cut through the rubbish to get collaborative change. Which is always the best way. We ping people sure here and there to needle them to change. It’s our job, our mandate to help fast track sustainability in the BE. But for 90 per cent of our efforts we are looking for SOLUTIONS. We had one event on housing a few years ago where one of the leading groups said the people on stage and in the audience had never been in the same room before. I’ve gotta say, I was gobsmacked. This occurred in modern times.

                1. Hello Tina,
                  I am happy to have further discussion on the subject as well as the other area’s being reviewed in the NCC. I will point out however contrary to what you have indicated that our feed back is that a number of other the Industry bodies, and Legislators up the chain are not as up to the mark to the Level HIA is regarding the NCC changes and as such I suspect the reason HIA got singled out in this article at the outset as they presented points that required consideration hence the reason Mr Rake took the position he did.

  2. Following up on brief mention of Livable Housing Standard in the new NCC. Same things are happening.
    Without consultation the ABCB/HIA has snuck in an exemption for dwellings of 55 m2 or less. This effectively excludes many one-bed apartments, studio apartments, and student accommodation from complying with the ABCB Standard for Universal Housing Design (the Standard).
    It was done on spurious assumptions they are too small to comply. But these are the easiest to do – no corridors and only two doors.
    Dwellings of <55 m2 are a form of affordable housing available in the private market and are particularly attractive to people on lower incomes, older people, particularly older single women, who rely on public transport and need ready access to shops and amenities. With this exemption, the housing industry is given permission to further disadvantaging the proposed residents in the private housing market.
    Something not right here.

  3. Interesting article that focuses a lot on financial savings as opposed to reducing our carbon footprint as a result of improving energy efficiency within our homes. People can save money by changing their behaviours on energy consumption however; a 7 to 10 star home will reduce our individual carbon footprint and hopefully lessen the devastating impacts of climate change. This should be the focus and overall motivation for change.

  4. A good article but “Don’t Look Up”!!!
    The NCC energy provisions haven’t been updated for 13 years from the rather meagre 6* energy efficiency standards compared to most other developed nations and the very height of acceptable ambition is 7* energy efficency!!
    Are you kidding me? The IPCC have given us a decade globally to get to net zero. Our best science considering 15 compounding feedback loops (that the IPCC modelling doesn’t fully consider) says we have to be net zero globally by 2030 (2 DegC of average warming) otherwise the climate WILL transition unstoppably to 4-6DegC of warming and mankind and 90% of other species WILL go extinct!!!. The new homes we build now will last 50-100 years – longer than the lives of our children extinguished by climate impacts if we don’t WTFU – so they MUST be NET ZERO NOW!
    AND THE KICKER IS – that if 7* homes are more affordable for homeowners from day 1, NET ZERO HOMES are even more affordable. The energy cost savings for a net zero home are up to 8 times greater than the incresease in mortgage payments to add the net zero measures – put simplistically net zero requires a reasonably energy efficient fabric, a north facing roof slope equipped from new with solar PV’s, sufficient to meet or exceed building energy loads and if extra solar is installed ready to plug in the Electric Vehicles that will be cheapest to buy from 2027 and free to run.
    Net Zero Homes weren’t even included in the NCCV2 CRIS modelling for entirely political (and presumably fossil fuel donor) reasons.
    WE ALL NEED TO BE DEMANDING NET ZERO NOW from our State/Territory governments and the new Labor Government (Ed Husic’s the new guy to write to). Here’s a campaign to engage with – petition, letters to ministers etc.

    1. It never ceases to amaze me how simplistic the promotion of Climate Change fixits parties seem to think it is. They spend all their time telling Industries and Gov’t how they need to do something. Can I suggest that if you believe it is that important then get off your high horse and do it as it will identify how hard it is to actually make happen. It may also surprise you that it won’t start at the NCC as there are a number of other area’s that have to be addressed before you get to the construction of a home.