Program 3: Engaged Communities
In the context of medium-density residential development, finance is often sought by the developer and apartment purchasers. The lending institution, in turn, seeks a property valuation for mortgage security purposes.
This project aims to develop an understanding of:
- The valuation process and the effect of energy efficiency initiatives on overall value of a property; and
- The tools required by valuation professionals to enable energy efficiency to be incorporated into the valuation process.
It is currently unknown how the energy efficiency is or is not incorporated within the property valuation process. This small research project will consult directly with valuers to develop insights in why this component of housing is oversighted in the valuation of residential properties in Australia
The research methods to collect data will be via an online survey using a three-round Delphi technique to establish a level of consensus among property valuers.
Program
Project leader
Dr Kathryn Davidson and Catherine Kain
Project status
Complete
Project period
02/2019 to 06/2019
- Publications
- Partners
CRCLCL Project Reports
RP3017u1: Insight into the property valuer’s perspective of energy efficiency in housing
The research examined the role of energy efficiency initiatives on overall residential property value and explored the ability of residential valuation professionals to incorporate energy efficiency into the valuation process, focusing on their use of currently available tools.
In the context of curbing greenhouse gas emissions through energy efficiency, passive and active energy-efficient design needs to be reflected in residential property values. This enables investment and affects the availability of finance for added energy efficiency options in new and existing housing.
While the Nationwide Housing Energy Rating Scheme (NatHERS) rating tool is available as an indication of energy efficiency in new homes, survey respondents’ (valuers) knowledge of NatHERS was very limited. Our research indicated that energy efficiency features were considered to have a minimal contributory effect on assessments of market value by the valuers surveyed.
The research identified that there are limited means available to a valuer when he or she considers applying a premium or discount that reflects energy efficiency initiatives, or the lack thereof, in a dwelling. Affirming the findings of other Australian and international studies, our research suggests that mandatory disclosure and certification are essential if energy efficiency is to be considered in residential valuation. Mandatory disclosure of energy efficiency directly indicates its importance in the home, creating an additional factor for consumer consideration. Mounting evidence signals a stronger relationship between energy efficiency in the home and market value.
Insight into the property valuer’s perspective of energy efficiency in housing (6948698 PDF)
Partners on this project
- University of Melbourne