Could an Eco Renovation Boost Your Property’s Value?

Did you know that energy-efficient homes generally attract premium prices and sell faster than non-eco listings?

The 2022 Domain Sustainability in Property Report found an energy-efficient house in the median range sells for $125,000 more (+17.1%) on average than a non-sustainable house. The results are quite good for apartments too, with energy-efficient units selling for $72,750 more (+12.7%) than a non-sustainable apartment. 

Dr Nicola Powell, Domain’s chief of research and economics, says more and more sellers are addressing the demand of eco-friendly homes, as online listings with popular eco features attract 8.7% more views on average. “More than half of all for sale listings in all states and territories contain energy-efficient keywords,” she says.

Home Features Today’s Buyers Want Most 

The Top Three Eco Features Popular in House Listing Searches Right Now Are:

1. Solar power: Australia has no shortage of sunshine, and there is no shortage of demand for houses with solar panels either. A 2020 Origin Energy survey showed 77% of Australians view houses with solar panels as being more valuable. And 55% of renters said they would consider paying increased rent for solar panels.

2. Water tanks: If you have a sizable garden or lawn, a sustainable irrigation system can help keep your water bill down. Make use of the rainy season by collecting water in tanks. When the dry season hits, you will be prepared with free, nutrient dense rainwater to lavish on your gardens.

3. Insulation and glazing: Window glazing and insulation can help stop your heating and cooling efforts from leaching out. You will also reduce the summer heat and winter chill invading your home.

Financing Your Eco Renovation

Depending on your situation, many lenders now offer green loans, including those with lower interest rates, to help homeowners install environmentally sound features. These loans can be a viable option, and seeking advice on the best approach, including the potential use of a personal loan, can be beneficial.

Another option at your disposal is to unlock the equity in your home to fund your eco renovation. And it’s not a bad time to consider doing so as property prices increased 23.7% in 2021.

So, how does ‘unlocking equity’ work? Let’s say you bought an $800,000 house three years ago that, due to last year’s property investment prices surge, is now worth $1 million. And let’s also say you took out a $600,000 loan for the house, which you have managed to pay down to $500,000. By refinancing that $500,000 loan into a $700,000 loan (70% of your property’s new market value), you can unlock $200,000 in equity to help fund a deposit for your renovations. It is also worth noting that banks will typically let you borrow up to 80% of a property’s market value. 

And don’t forget to check out any government rebates that may be available to help with your eco renovation. 

Get in Touch

If all of this seems confusing, don’t fret. We are more than happy to help you navigate loans, equity and refinancing for your eco renovation. And if you decide to proceed, the good news is that part of the process can include refinancing your home loan. 

Why’s that good news? Well, just because interest rates are going up, does not mean you can’t scope out a better deal on your mortgage. Competition amongst lenders remains fierce, particularly if you have a decent amount of equity and a strong track record of meeting mortgage repayments. If you would like to discuss your renovation and/or refinancing options, get in touch today! 

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au