The house design where you won't need a heater in winter

There’s much talk about Passive House Design—or ‘Passivhaus’ as it was known in Germany where it originated —in 2024 and the energy-saving efficiencies it offers homeowners. From the exterior, you wouldn’t know whether a home has incorporated passive house design or not. But journey inside, and you’ll find a different experience home awaits.

The first thing you’ll notice from a passive home is it’s incredibly quiet; the outside noise is reduced thanks to exceptional sound insulation. You’ll then come to notice a comfortable temperature range — never too hot, never too cold — with fresh air filtrating each and every room. For those that detest dust, you’re likely to find fewer cleaning tasks each month.

Passive House Design is changing the way people live, the energy they save, and the comfort they’ll come to cherish. Chief Creative Officer of Melbourne Design Studios Felicity Bernstein says it’s only a matter of time until Passivhaus is the go-to for every home — the definition of modern luxury living.

“In Passivhaus, we are a lot less reliant on solar heat gains than in a traditional Aussie home. Passive Houses stay warm through the increased insulation and the continuous airtightness throughout; all rooms of the entire house are equally warm, and there are basically no hotspots or unconditioned spaces,” said Ms Bernstein.

“You can imagine a Passivhaus a little bit like an esky: the temperature you have inside will be generally kept inside, and is kind of independent from the outside. Humans give off heat and so do appliances and that really is all that is needed if you have a well built Passivhaus. That is why you can hardly imagine to ever live in a non Passivhaus ever again once you experience the level of natural comfort a Passivhaus can offer.”

Below, Ms Bernstein explains the principles around Passivhaus and the key factors to its design throughout homes.

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What is passive house design?

Coined by physicists Bo Adamson and Wolfgang Feist in the 1970s, the leading principles around Passive House Design describe an approach to building design that focuses on passive strategies for achieving optimal energy efficiency and comfort. This is done through such design techniques like utilising sunlight through large windows or skylights, or allowing optimal ventilation throughout designated areas to provide both heating and cooling. Through passive design, the indoor environment of a home is incredibly comfortable, and that translates to other areas like noise and aesthetics, too.

“In Passivhaus, the surface temperature of materials is not much different to the room temperature due to incredible advanced construction detailing and built methods. That means that you have a lot more design freedom in what materials you can use,” said Ms Bernstein.

“You basically can have anything on the inside, as the continuous insulation layer is disconnecting any inside material from the temperature condition of the outside.”

Consider the geometry of your home

It’s essential to design your home’s layout and orientation in a way that maximises solar gain during the winter months, while minimising solar heat gain during the summer.

“From a design point of view, we try to keep the geometry of the home relatively compact as it will help the home to perform — that would apply to both a Passivhaus or a more traditional home based on passive solar design,” said Ms Bernstein.

“Active shading is important in Passivhaus, especially in summer. While in a Passivhaus you can trust having a warm home throughout winter and don’t have to hope for sunshine to heat your home, a more traditional home working with passive solar design would benefit substantially from lots of north facing glazing in combination with thermal mass underfoot, like a concrete slab that can store that solar heat gain.”

Think about natural insulation

Using high-performance insulating materials throughout main areas throughout your home—like floors, roofs and in walls—will help to minimise the heat transfer between the interior and exterior of your home. It’s also important to ensure that the installation of insulation is continuous across materials to eliminate thermal bridging, which can lead to energy loss.

A great starting point for insulation is incorporating engineered timber flooring throughout your home, which insulates and increases the energy efficiency of your home.

“We [Melbourne Design Studios] are personally big fans of FSC-certified timbers or recycled timber surfaces, as we as humans have an innate connection to timber. It is warm and soft to touch, enhances biophilic connection, is supporting better acoustics and indoor air quality,” said Ms Bernstein.

“And topping all this, it sequesters carbon which hugely helps to remove carbon from the atmosphere and is our number one material to achieve carbon zero constructions.”

Airtight construction is pivotal

Implementing airtight construction techniques ensure that there is no way for air leakage or drafts to occur, which can significantly reduce heating and cooling expenditure. One key way of factoring this in is through the Mechanical Heat Recovery Ventilation (MHVR) system, which is crucial for maintaining indoor air quality and comfort (with minimal energy consumption).

“In Passivhaus, a mechanical heat recovery ventilation system supplies fresh at the indoor temperature all the way through your home,” said Ms Bernsstein.

“This, combined with the airtightness and continuous insulation, completely cuts out the feeling of drafts which brings an unknown comfort to the inhabitants.”

You don’t need traditional design methods to warm your home

Unlike traditional homes, in Passivhaus, the use of temperature control elements, like a fireplace, curtains, or specialised windows, aren’t necessary in heating and cooling your home. In fact, in Passivhaus, there really is no need for a heat source of this kind at all.

There is, however, a way to merge both worlds of Passivhaus and a more traditional home to create a warm and welcoming look and feel.

“Ethanol fireplaces don’t give up too much heat and don’t need a flue – they are clean and easy to maintain and you have a lot of design freedom too,” said Ms Bernstein.

“Otherwise we find that natural materials like timber, marble, clay render, and lime wash paint vibrate some warm hues into any space. Combined with some cushions, rugs, and throws this can feel very warm. And the best thing is, in Passivhaus, it is always nice and warm – no cold feet anymore!”

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For decades, Australia has leaned into its reputation as the lucky country. But luck, as it turns out, is not an economic strategy.

What once looked like resilience now appears increasingly fragile. Beneath the surface of rising property values and steady headline growth, the Australian economy is showing signs of strain that can no longer be ignored.

Recent data paints a sobering picture. Australia has recorded one of the largest declines in real household disposable income per capita among advanced economies.

Wages have failed to keep pace with inflation, meaning many Australians are working harder for less. On a per capita basis, income growth has stalled and, at times, reversed.

And yet, on paper, things still look relatively solid. GDP is growing. Unemployment remains low. But that growth is increasingly being driven by population expansion rather than productivity.

More people are contributing to output, but not necessarily improving living standards.

That distinction matters.

For years, Australia’s economic success rested on a powerful combination: a once-in-a-generation mining boom, a credit-fuelled housing market, strong migration and a property sector that rarely faltered. Between 1991 and 2020, the country avoided recession entirely, building enormous wealth in the process.

But much of that wealth is tied to property. Around two-thirds of household wealth sits in real estate, inflated by leverage and sustained by demand. It has worked, until now.

The problem is the supply side of the economy has not kept up.

Housing supply is falling behind population growth. Rental vacancies are near record lows.

Construction firms are collapsing at an elevated rate. At the same time, massive infrastructure pipelines are competing with residential projects for labour and materials, pushing costs higher and delaying delivery.

The result is a system under pressure from all angles.

Despite near full employment, productivity growth has stagnated for years. In simple terms, Australians are putting in more hours without generating more output per hour. The economy is running faster, butgoing nowhere.

Meanwhile, government spending continues to expand. Public debt is approaching $1 trillion, with spending now accounting for a record share of GDP.

The gap between spending and revenue has been filled by borrowing for decades, adding further pressure to an already stretched system.

This is where the uncomfortable question emerges.

Has Australia become too reliant on a model driven by rising property values, expanding credit and population growth?

As asset prices rise, households feel wealthier and borrow more. Banks lend more. Governments collect more revenue. Migration fuels demand. The cycle reinforces itself.

But when productivity stalls and debt outpaces real income, the system begins to depend on constant expansion just to stay stable.

It is not a collapse scenario. But it is not particularly stable either.

Nowhere is this more evident than in housing.

The National Housing Accord targets 1.2 million new homes over five years, yet current completion rates are well below that pace. With approvals falling and construction costs rising, the gap between supply and demand is widening, not narrowing.

Housing is also one of the largest contributors to inflation, with costs rising sharply across rents, construction and utilities. Yet the private sector, from small investors to major developers, is struggling to make projects stack up in the current environment.

This brings the policy debate into sharper focus.

Tax settings such as negative gearing and capital gains concessions have undoubtedly boosted demand over the past two decades. But they have also supported supply. Removing them may ease prices briefly, but risks deepening the supply shortage over time.

That is the paradox.

Policies designed to make housing more affordable can, in practice, make the shortage worse if they discourage development. The optics may appeal, but the economics are far less forgiving.

It is also worth remembering that most property investors are not institutional players. The majority own just one investment property. They are, in many cases, ordinary Australians using real estate as their primary wealth-building tool.

Undermining that system without replacing it with a viable alternative risks unintended consequences, from reduced supply to higher rents and increased inflation.

So where does that leave Australia?

At a crossroads.

The country can continue to rely on population growth and rising asset prices to drive economic activity. Or it can shift towards a model built on productivity, innovation and sustainable growth.

The latter is harder. It requires structural reform, long-term thinking and political discipline.

But it is also the only path that leads to genuine, lasting prosperity.

The question is no longer whether Australia has been lucky.

It is whether it can evolve before that luck runs out.

Paul Miron is the Co-Founder & Fund Manager of Msquared Capital.

The house design where you won’t need a heater in winter

A popular construction method in Europe, Passive House design has plenty to offer Australians keen on an energy efficient, cost effective home

As housing drives wealth and policy debate, the real risk is an economy hooked on growth without productivity to sustain it.