In Melbourne’s progressive inner north, sustainability sells.
It’s an area that has attracted several innovative developers keen to subvert the money-grabbing stereotype and provide quality homes that are better for people and the planet. And they seem to be able to do this and make a profit.
The inner north is the birthplace of the innovative Nightingale model, to start, and Assemble’s rent-with-the-option-to-buy. Other developers with sustainable projects include Kincaid, Milieu, HIP V. HYPE and Excelon Group.
What The Fifth Estate would like to know, is if this distinctive brand of sustainable, liveable housing is spreading into the rest of Melbourne, regional Victoria and even interstate.
According to one of the directors of another sustainability-minded developer with a notable footprint in the inner north, Neometro’s James Tutton, it’s starting to hit the mainstream. He says that’s mainly because the economics of sustainability are shifting.
Mortgage providers are starting to offer lower mortgage rates for homes with better energy ratings, for example, and larger financers now have pre-agreed star rating requirements so that developers are hit with higher interest rates if they don’t meet their targets.
Policy is also moving the needle, with town planners recognising the benefits of sustainability and favouring strong sustainability attributes accordingly.
Tutton says financial and regulatory triggers are shifting the bulk of industry, even in the south, which he says shares few of the same values as people in the north.
“In a lot of ways, Melbourne has become pretty culturally divided … and it’s compounded, the difference between the north and south has become more severe.”
What about other markets outside Melbourne? Sydney, perhaps?
Tutton says that while the company has looked at projects in other cities, it’s a big jump to go into “alien territory”.
“Our focus is firmly on Melbourne.”
Tutton’s company has just sold four sustainable three-bedroom homes in Northcote in “record time”. The homes, which have 7-star NaTHERS energy ratings, 2000 litre rainwater tanks, wiring for solar-panels, double-glazed windows and timber-framing, sold in five days for between $1.5-1.9 million.
“We’ve never had an instance where we’ve launched a project and it’s sold out in five days.”
Granted, house prices are rising and sales surging, with newly reported home sales in Melbourne up 32.7 per cent over the past week according to Archistar.
Tutton says there was no single factor for the record sales: price, location, sustainability, and design were all important.
Consistency in design is something Tutton’s business takes very seriously.
“We’ve got a consistent real estate DNA … this is seen in automotive design or fashion, but developers tend to change architects and tend not to have their own design DNA.”
The company does use different architects but Tutton says, playfully, that “we’re more likely to micro-manage them”.
He says having a design “handprint” gives customers confidence.
The developer also launched a Brunswick apartment project at the start of Covid that had enough presales to bring in senior debt. Construction has now started.