Old Housing Stock Key To Reducing Emissions
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Old Housing Stock Key To Reducing Emissions

A report indicates the redevelopment of old housing is essential to carbon neutral plans.

By Terry Christodoulou
Thu, Nov 4, 2021 11:56amGrey Clock < 1 min

Nearly 8 million homes are past their use-by-date according to the Australia Affordable Housing Environmental Scan 2022 by PowerHousing Australia.

The report suggests that many of these outdated properties could be torn down to build multiple energy-efficient dwellings and address the housing crisis.

According to the report, one old standard house on an 800 to 1000sqm block could make way for up to three new homes. Most of the homes have existed for 30 years or more and contribute up to 18% of the country’s emissions.

While Australia looks to tackle rising emissions with advances in technology, PowerHousing Australia chief executive Nicholas Proud suggests the redevelopment of old housing could help tackle both emissions and affordability while technology comes up to speed.

“Australia’s 8 million pre-energy rated homes are now well past their use-by date, contributing up to 18 per cent of Australia’s greenhouse gas emissions and a real liability when it comes to hitting our Paris Agreement commitments for net-zero emissions.”

Mr Proud suggests that Australia will struggle to meet the UN net zero emissions target for 2050 without the repurposing of building materials

“The first step to meet our obligations to future generations is the repurposing and refurbishing older inefficient dwellings, as existing dwellings account for 95 per cent of our building stock and already have an embodied carbon component,” he said.

In 2003, a four-star Nathers energy rating became mandatory for all new homes. Prior to this, there was no obligation to make homes energy efficient and most homes built after the 1950s came in at one to two stars.

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House values continued to fall last month, but the pace of decline has slowed, CoreLogic reports.

In signs that the RBA’s aggressive approach to monetary policy is making an impact, CoreLogic’s Home Value Index reveals national dwelling values fell -1.0 percent in November, marking the smallest monthly decline since June.

The drop represents a -7.0 percent decline – or about $53,400 –  since the peak value recorded in April 2022. Research director at CoreLogic, Tim Lawless, said the Sydney and Melbourne markets are leading the way, with the capital cities experiencing the most significant falls. But it’s not all bad news for homeowners.

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 percent,” he said. “That has now reduced by a full percentage point to a decline of -1.3 percent in November.  In July, Melbourne home values were down -1.5 percent over the month, with the monthly decline almost halving last month to -0.8%.”

The rate of decline has also slowed in the smaller capitals, he said.  

“Potentially we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls,” Mr Lawless said. “However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.” 

The RBA has raised the cash rate from 0.10 in April  to 2.85 in November. The board is due to meet again next week, with most experts still predicting a further increase in the cash rate of 25 basis points despite the fall in house values.

Mr Lawless said if interest rates continue to increase, there is potential for declines to ‘reaccelerate’.

“Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire,” Mr Lawless said.

Statistics released by the Australian Bureau of Statistics this week also reveal a slowdown in the rate of inflation last month, as higher mortgage repayments and cost of living pressures bite into household budgets.

However, ABS data reveals ongoing labour shortages and high levels of construction continues to fuel higher prices for new housing, although the rate of price growth eased in September and October. 

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