Greening the property market: why more vendors advertised sustainable features in 2023
The states and the suburbs with the highest number of environmentally friendly properties for sale are not where you think
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Just under 15 percent of homes for sale in FY23 were ‘green listings’, new research reveals.
Green listings, which are defined as having at least one environmentally-friendly feature providing energy or water savings, such as solar panels, a home battery and rainwater tanks made up 101,479 of the 687,874 homes that went onto the market in FY23, Australia’s largest real estate network, Ray White, reports.
Queensland had the highest proportion of green listings overall in FY23 at 20.3 percent. This compares to 19.6 percent in the Northern Territory, 19.5 percent in South Australia, 16.1 percent in the ACT, 15.7 percent in Western Australia, 11.6 percent in Tasmania and 11.4 percent in both New South Wales and Victoria. The number of green listings advertised has been growing over the past three years as homeowners think more about their carbon footprint and embrace sustainability. The number of listings with one or two green features has risen from 17.2 percent of listings in 2020 to 19.5 percent in 2023, according to Ray White.
Skyrocketing electricity prices and the availability of government incentives to encourage homeowners to invest in eco-friendly features are no doubt contributing to higher interest in green homes. A growing uptake of electric vehicles (EVs) is also leading to more homeowners installing EV chargers in their garages. The Electric Vehicles Council of Australia reports that the number of sales of EVs in the first half of 2023 exceeded the total number sold in 2022.
Buyers’ interest in green features is prompting more agents to include such details in the advertising copy for homes for sale, said Ray White data analyst, William Clark. “Over the last three years, there has been an increasing proportion of listings with ‘solar panels’, ‘battery’ or ‘off-grid’ appearing in advertising copy,” he said. “This is not an exhaustive list of ways a house can be green, however solar panels were the most frequently advertised, while batteries and being off-grid make a house green to the greatest degree.”
In New South Wales and Victoria, the suburbs with the highest percentage of green listings were all in regional areas. In other states and territories, there was a broader mix across regional and capital city suburbs. Clark said green properties were more commonly houses on large blocks of land. “With regional areas having a higher proportion of houses rather than units, single-family dwellings may retrofit green features such as solar panels and battery packs quicker and more autonomously than units and complexes with large strata groups. This means states, cities and suburbs with more houses and fewer units will see a higher proportion of green listings.”
Here are the suburbs with the highest percentage of green listings advertised in FY23.
Top suburbs for green listings
Source: Ray White, suburbs with at least 10 listings advertised in FY23
The greening of Australian homes is being helped along by regulation, with a new law in Victoria banning gas connections in newly built properties coming into effect yesterday. The ACT was the first state or territory to introduce such a law, which came into effect there in December.
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This may be contributing to continually rising weekly rents
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There has been a substantial increase in the number of Australians earning high incomes who are renting their homes instead of owning them, and this may be another element contributing to higher market demand and continually rising rents, according to new research.
The portion of households with an annual income of $140,000 per year (in 2021 dollars), went from 8 percent of the private rental market in 1996 to 24 percent in 2021, according to research by the Australian Housing and Urban Research Institute (AHURI). The AHURI study highlights that longer-term declines in the rate of home ownership in Australia are likely the cause of this trend.
The biggest challenge this creates is the flow-on effect on lower-income households because they may face stronger competition for a limited supply of rental stock, and they also have less capacity to cope with rising rents that look likely to keep going up due to the entrenched undersupply.
The 2024 ANZ CoreLogic Housing Affordability Report notes that weekly rents have been rising strongly since the pandemic and are currently re-accelerating. “Nationally, annual rent growth has lifted from a recent low of 8.1 percent year-on-year in October 2023, to 8.6 percent year-on-year in March 2024,” according to the report. “The re-acceleration was particularly evident in house rents, where annual growth bottomed out at 6.8 percent in the year to September, and rose to 8.4 percent in the year to March 2024.”
Rents are also rising in markets that have experienced recent declines. “In Hobart, rent values saw a downturn of -6 percent between March and October 2023. Since bottoming out in October, rents have now moved 5 percent higher to the end of March, and are just 1 percent off the record highs in March 2023. The Canberra rental market was the only other capital city to see a decline in rents in recent years, where rent values fell -3.8 percent between June 2022 and September 2023. Since then, Canberra rents have risen 3.5 percent, and are 1 percent from the record high.”
The Productivity Commission’s review of the National Housing and Homelessness Agreement points out that high-income earners also have more capacity to relocate to cheaper markets when rents rise, which creates more competition for lower-income households competing for homes in those same areas.
ANZ CoreLogic notes that rents in lower-cost markets have risen the most in recent years, so much so that the portion of earnings that lower-income households have to dedicate to rent has reached a record high 54.3 percent. For middle-income households, it’s 32.2 percent and for high-income households, it’s just 22.9 percent. ‘Housing stress’ has long been defined as requiring more than 30 percent of income to put a roof over your head.
While some high-income households may aspire to own their own homes, rising property values have made that a difficult and long process given the years it takes to save a deposit. ANZ CoreLogic data shows it now takes a median 10.1 years in the capital cities and 9.9 years in regional areas to save a 20 percent deposit to buy a property.
It also takes 48.3 percent of income in the cities and 47.1 percent in the regions to cover mortgage repayments at today’s home loan interest rates, which is far greater than the portion of income required to service rents at a median 30.4 percent in cities and 33.3 percent in the regions.
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