Sharing Transparency for a More Efficient Future

Energy Efficiency Rating and House Price in the ACT

Author/Author Organization: 
Australian Department of the Environment, Water, Heritage and the Arts

In 2007, the Department of the Environment, Water, Heritage and the Arts (DEWHA) commissioned the Australian Bureau of Statistics (ABS) to produce a statistical report modelling the relationship between the energy efficiency rating (EER) of houses and house prices in the Australian Capital Territory (ACT).

This statistical report and the Department’s overview of it is the first study of its kind in Australia.

It shows that the ACT housing market, which in 1999 became the first jurisdiction in Australia to introduce mandatory energy disclosure for all houses on the market, places a higher value on energy efficiency and suggests that ‘location, location, EER’ has replaced the traditional real estate mantra of ‘location, location, location’ in the ACT.

The study looked at whether a relationship exists between the EER of a house and sale price using data from 2005 and 2006 and found that a statistically significant relationship does exist. This means, if a house has a higher EER than another house, but in all other respects the houses are the same, the house with the higher EER will command a higher price.

In Europe, energy efficiency disclosure (providing information about a house’s energy efficiency) is high on the energy and climate change agenda. Mandatory energy efficiency disclosure is also being considered in a number of other countries, including Australia.

This study will be of value to all governments considering disclosure as a way to improve energy efficiency in existing houses. It will also be of interest to consumers, the real estate sector and the building and housing industries.

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