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When the National Construction Code comes up for updating it’s usually a time for furious debate – and opposition – from builders who say the for higher energy standards will be too expensive. But now the research is in: better quality building saves people big dollars

Building a seven star energy rated home could soon become mandatory under the latest update of the National Construction Code. This could see one Hobart home owner pay their mortgage off 14 months earlier than if they built to the existing six star standard.

According to sustainability not-for-profit group Renew a house at 7.5 or above NatHERS rating is the best economic option because any extra upfront spending such as better insulation is comfortably offset in lower bills.

The modelling is based on proposed changes to the National Construction Code, which were released for public discussion last week. The headline change is the proposal to increase thermal performance for homes from the current, 6-stars NatHERS equivalent, to an equivalent of 7 stars.

Also on the table is a whole-of-home annual energy use budget for keeping energy use in check. Similar to the method used in NSW under the BASIX scheme, this will mean the energy performance of built in appliances will also be addressed in the code rather than just the thermal performance of the building envelope.

Basically, the proposal is for homes to be given an energy budget to work to and adjust the efficiency level of the building envelope and appliances, with the option of using renewables to offset some of the energy used by the building.

One of the authors of the Renew report, Rob McLeod, said the team started with a baseline scenario – a six star home with basic appliances – and devised several other scenarios that might eventuate under the revised code, with the highest performing option a 7.5-star all-electric home with efficient appliances.

The researchers then assessed the cost effects of these hypothetical homes across four major cities, considering both the additional upfront costs and the savings on bills.

Addressing household cashflow – including mortgage repayments and bills – was a new addition to this sort of modelling. It revealed that in all four of the locations (Hobart, Sydney, Melbourne and Perth) residents can expect that the savings on bills by purchasing a 7 star home will outpace higher monthly mortgage repayments to pay for the extra quality.

For example, even if mortgage repayments go up by $20 a month for the extra insulation that goes into a 7 star house, the upgrade might save $50 a month in bills. 

“There’s no loss for residents, they will be better off from the get-go.”

This saving ranged across the different regions, with mortgages in some cities higher than others and different climates calling for different levels of heating and cooling. Homes in Hobart, for example, use more heating than dwellings in Sydney but mortgages in the NSW capital are much higher than in the Tasmanian city.

[Source: Renew report]

The other compelling finding was how much quicker people could pay off their mortgages with an energy efficient home. Residents of Hobart can expect to wipe over a year off their mortgages and eight months in Perth. The savings were less pronounced in Melbourne (three) and Sydney (two). 

The modelling showed bills were markedly lower for the more efficient homes. In dual fuel homes, households saved $1484 a year in Hobart, $1043 in Melbourne, $1059 in Sydney, and $1287 in Perth.

For all-electric homes, these savings were similar at $1231 in Hobart, $1056 in Melbourne, $1203 in Sydney and $1357 in Perth.

“Savvy buyers who want to save on bills should ditch gas altogether. We found that all-electric homes with solar and energy efficient appliances can cut bills by 80 per cent and take years off a typical mortgage, by using less, generating more, and cutting out gas connection fees,” Renew chief executive officer Paul Bowers said.

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  1. It would be great to bring envelope air tightness into the spot light.
    All homes should pass a blower door test prior to issuing of an occupation certificate.