This is going to sound very politically incorrect, but I’m going to put it out there anyway. When I look at a property, my concern is not how ‘green’ it is.
BY VANESSA DE GROOT
To be quite frank, it’s not even something I would consider at all, unless it was specifically brought to my attention. Now I understand the environment is important and I appreciate that having ‘green’ features to a property can mean the costs to run it are decreased, but it’s just not something I look for and I really don’t think I’m willing to pay for it. At least not at this point in time.
I’m sure there will be people reading this that are shocked by this, but I don’t think I’m alone. I think there are lots of people out there who also aren’t willing to pay more for a property simply because it’s more environmentally friendly than another.
So when I heard the news recently that the government intends to introduce a scheme that will make it compulsory for homeowners to get a ‘green rating’ for their property before they sell or lease it, I wasn’t over the moon.
And what’s more, it’s expected to cost up to $800 to get this rating.
First of all, in this climate of economic uncertainty, where the property market has already considerably slowed, I don’t think it’s a good idea to add yet another cost to transacting a home.
I also question how much attention people will pay to the green rating. I really don’t think it’s going to play a huge part in people’s decisions to buy a home or not. And what if it does? Does that mean every property owner is going to have to upgrade their home to make it more green to sell it? That’s going to cost even more money, most likely heading into the thousands of dollars. And will those properties that aren’t particularly green lose a significant value? I really can’t see people valuing ‘green’ qualities in this day and age over proximity to the city, transport or amenities. Or even the status of an area.
While I appreciate we’re moving towards being a more environmentally-friendly and aware nation, I’m not sure we’re quite ready to make a move like this. And especially one that could cost so much money.
Perhaps if the government is so keen to promote the environmentally friendly message it should actually be paying for each and every home to get this green rating?
I also have questions about how beneficial to the environment certain ‘green’ characteristics of homes really are.
I was recently having a conversation about solar panels with someone who informed me that they take more energy to manufacture than they will ever generate. Now, this may well be a myth… If anyone out there knows, please tell me!
Either way, I’m just not so sure that requiring a mandatory ‘green rating’ for properties is the way to go at the moment. Where does the rating system stop then?What about making owners and landlords pay for a ‘safety rating’ of their home? I think that would be far more worthwhile! I’d rather know how likely I am to injure myself from something amiss in the property than how much energy I’m likely to save. Or how about an ‘enjoyment rating’ to tell me how much I’ll enjoy living in the property, based on specific attributes of both it and its proximity to services? That would also help!
What do you think? Do people really care about how ‘green’ a property is in this day or age, or is it still low on their list of priorities? Or does it vary from area to area – are people more concerned with it in certain parts of Australia, and not in others?
Vanessa De Groot is the deputy editor of Australian Property Investor magazine, www.apimagazine.com.au
Hi Vanessa whether a property is green or not, is not on my priority list at all. Maybe it should be, but it’s not.
Comment by Jo — September 15, 2011 @ 10:52 am
Thanks Jo – I’m glad to hear I’m not alone on this one!
Comment by Vanessa De Groot — September 15, 2011 @ 11:52 am
If the government introduces such a scheme, then consider that ‘bringing it to your attention’. I am a property investor too, and as much as I would like to think that the gravy train that has been Australian property for the past decade or so will continue, I think not. At best, a relatively long period of overall stagnation in prices is more likely in my opinion. OK to hold on to what you’ve got, not so good to be buying up more unless they have great cashflow.
You’re absolutely right – most people have absolutely no idea what is happening across the world and what it really means. With the global population hitting 7 billion this year, food inflation rising, water shortages growing, and the age of easy oil disappearing, we are in for one massive shock to the system over the next decade. The government is doing what it can, bit-by-bit without risking being thrown out of power (although it’s debatable whether they’ve got that bit right).
Unless Australia becomes green fast, we are inevitably going to slide backwards. Infinite growth on a finite planet? Think about it.
Comment by Drew Harvey — September 22, 2011 @ 12:30 pm
There will soon be an economic value on the environment which should fundamentally change the way that investors their property. If they do not change now and embrace this change now they will be left behind when legislation occurs.
This is not about an economic cost but about economic, social and environment benefits.
Comment by Deniz — September 22, 2011 @ 1:03 pm
We are in the age of extinction – yeah you better believe it, we are recklessly destroying the planet, and we need to start looking after it. ‘Green homes’ are one of a multitude of efforts that will help. Unfortunately houses are detrimental to the environment and the worse they are the more they should compensate for being so.
Comment by mike — September 22, 2011 @ 3:19 pm
It is like most things, they need to be legislated to look after the uninformed. Take the example of bicycle helmets where it had to be made law because people do not understand the implications of a bicycle accident. It is time to learn Vanessa and Jo, it is not all about money. Drew, Deniz & Mike provide excellent information for you. Build on this and stop destroying this planet as future generations deserve a home.
Comment by Peter — September 22, 2011 @ 5:26 pm
Re safety… essentially that would relate to the current “caveat emptor” approach, it’s up to the buyer to check out everything. This actually adds significantly to the costs of a buyers, because each buyer has to do this individually.
In the Netherlands the seller is legally responsible for undisclosed defects and other issues (like old septic tanks, stuff like that). While that may be regarded as a burden, it does prevent a lot of issues, sets clear responsibility and actually saves everybody money. Win.
If the govt were to pay for the environmental assessment, we’d be paying for it anyway, just more spread out. I think going either way can be argued, but I don’t believe the current way is invalid.
There’s massive value in creating a “greener” house. I’m actually currently house-hunting. Now, the environmental assessment will not in itself be a dealbreaker for me, but I’m fairly aware of how things work and so when I look at a place I’m seeing how for instance I can insulate everything if it’s not already, and make other relevant changes over time. I don’t necessarily require the seller to have made all those changes, but it is relevant to me to know whether it’s architecturally/structurally possible at all to do what needs to be done.
I don’t even care about whether legislation comes in later to force me to do stuff, that’s not the driver for me. I know that doing these things puts me in a better position in the future, economically as well as in other aspects. And, I have no right to mortgage my child’s future – direct economic benefit to me is only one issue, but it’s not all by any means.
Just worrying about the electricity bill now is understandable, but also shortsighted.
Comment by Arjen Lentz — September 22, 2011 @ 9:45 pm
Firstly, excellent post Drew Harvey. Vanessa’s mentality is a good example of one of the largest faults with capitalism i.e. $ is the only thing that matters. It is a fact of life that legislation is required because human beings are often too lazy, greedy, selfish or ignorant to look after themselves, each other, the planet etc. Sadly there are people in this world that are more concerned with making a bigger profit and buying the next thing then whether or not future generations will have clean drinking water, clean air, healthy bio-systems and flora and fauna etc. I doubt Australia will willingly embrace a green-building mentality or adopt more efficient lifestyles without significant motivation from the Government. Hopefully the Australian Government has the courage to take a long-term view of Australia and its environment and sticks by Green-schemes such as this. IMO, one way or another, within 20 years all Australians will be forced to take a more conservative and resource-aware approach to the world.
Comment by Trevor Verde — September 23, 2011 @ 3:46 pm
Re solar panels:
Yes, I believe it is a myth that they will never replace the power used in their manufacture. I have seen figures that the payback period in this regard is about three to five years, depending on type.
In these days of rising electricity prices, it certainly would be a deal breaker for me to consider whether a house would cost me $$$ a year in power bills, or would pay me something for feeding back into the grid.
Comment by Michael — September 26, 2011 @ 11:56 am