When people inspect a home, they make quick calls on how it feels. Is the hallway cold? Does the living room cook in the afternoon? How hard is the air conditioner working? Until now, most of that has been guesswork.
That is changing. A new report from Cotality and the Real Estate Institute of Australia (REIA), The Efficiency Edge, shows that energy efficient homes are already selling and renting for more. And with energy ratings being rolled out to existing homes, how a house performs is about to become as visible as its floor plan.
If you’re planning a new home, this matters. Here’s what the research found, and what it means for the house you build.
Key takeaways
- Cotality analysis of over six million Australian homes found each extra NatHERS star was linked to around 1.3% higher value. Solar was linked to around 2.7%.
- Around 70% of established Australian houses are estimated to rate below 4 stars. New homes must now reach 7.
- NatHERS ratings for existing homes launched nationally in July 2026, and every state and territory has agreed a framework for disclosing them.
- Building to a high standard now puts your home ahead of where the market is heading, and it’s more comfortable to live in from day one.
What did the Cotality and REIA report find?
In its Watt’s it Worth research (September 2025), Cotality analysed over six million Australian homes. Houses with solar panels achieved prices around 2.7% higher than comparable homes without them. Each additional NatHERS star was associated with an average of around 1.3% greater value nationally.
On a $1.2 million home, 1.3% is about $15,600. Per star.
The Efficiency Edge builds on that with real sales and rental campaigns from around the country. The common thread is interesting. Buyers rarely walk in asking for “energy efficiency”. They ask for comfort, natural light, fresh air and lower bills. Those are exactly the things a well-performing home delivers.
Four homes that show performance pays
A regional home that sold 66% above the median
In Cygnet, in Tasmania’s Huon Valley, a contemporary off-grid home with thermally broken double glazing, an insulated concrete slab, hydronic heating and a battery system sold in August 2025 for $1,475,000. The local four-bedroom median was around $890,000. The selling agent put it simply: “The rarity increased its value.”
A compact city home with a same-day, full-price offer
In Mount Hawthorn, Perth, a three-bedroom home on a 200 m² lot sold in August 2023 for $1.25 million, around 14 to 24% above comparable homes. It was designed for northern light and cross-ventilation, with thermally broken double glazing and shading. It now rents for around $1,250 a week, against a suburb median of about $950.
A townhouse that sold 22% above the median
In Fremantle, a 7.5-star townhouse with rooftop solar and a shared community battery sold in April 2026 for $1,555,000, around 22% above the local three-bedroom median. The campaign drew 230 enquiries and six offers. One buyer rated the home’s sustainability features eight out of 10 in their decision to buy.
Renters who paid $350 a week more for a warmer house
In Canberra, a family compared two four-bedroom rentals in O’Connor. One was rated 2.5 stars, at about $1,000 a week. The other was rated 6 stars, the top of the ACT’s scale for established homes, at $1,350 a week. They chose the 6-star home. Their first electricity bill came back as a $146 credit, rebate included. The bigger change, they said, was the comfort.
Some of these homes had other things going for them too, such as a better location or an extra bathroom. But in each case, the agent, buyer or tenant pointed to how the home performed as a key part of the result.
Why most Australian homes fall short
Around 70% of established Australian houses are estimated to perform below 4 stars out of 10 under NatHERS, the Nationwide House Energy Rating Scheme. New homes now have to reach 7 stars.
That gap is one you can feel. According to the Australian Government, lifting a home from 3 to 5 stars can reduce heating and cooling energy use by around 40%.
Much of Australia’s housing was built when energy was cheap, and designed to rely on heaters and air conditioners instead of good design. Two homes of the same size, age and street can perform very differently once you live in them, and there has been no easy way to tell them apart. As the report points out, you can get clearer energy information for a $1,000 washing machine than for a $1 million home.
Home energy ratings are coming. What’s changing?
Several things are moving at once.
- Ratings for existing homes. Stage 2 of NatHERS for existing homes launched on 1 July 2026, giving Australia a national way to rate homes that are already built. The government’s homeenergyrating.gov.au gives buyers, owners and industry access to rating information.
- Disclosure. All states and territories have agreed a nationally aligned framework for disclosing ratings. The ACT has required ratings at the point of sale since 1999. NSW is introducing voluntary disclosure. Victoria brings in minimum energy efficiency standards for rental homes from 2027. Queensland has no disclosure requirement yet.
- Finance. The government has committed $1.3 billion to the Household Energy Upgrades Fund, and the major banks offer finance for upgrades like insulation, double glazing and solar.
- Buyers. Government research found 86% of people think it’s important to see a home’s energy rating when buying, and 75% when renting.
Timing will differ from state to state. The direction is the same everywhere. How a home performs is becoming part of how it’s marketed, compared, financed and valued.
What this means if you’re building now
A new home is built to last 50 years or more. Over that time it will be sold, rented or refinanced in a market where energy ratings are visible. Building to the minimum today means building to the bottom of tomorrow’s market.
That’s why we build to high-performance and Passive House principles. This is how the system works:
- Continuous insulation with no thermal bridges, so the inside stays at a steady temperature.
- An airtight building envelope, tested with a blower door during construction, so there are no draughts. Read more in What Is an Airtight Home?
- High-performance windows and doors, because glazing is where most homes lose and gain the most heat.
- Mechanical ventilation with heat recovery, so fresh, filtered air comes in all day without opening a window.
A certified Passive House is designed to need very little heating or cooling. The Passive House standard limits heating demand to 15 kWh per square metre per year, a much stricter target than the 7-star minimum. If you’re new to the idea, start with What Is a Passive House?
The value case is real. It’s also the smaller part of the story. The renters in Canberra didn’t stay for the $146 credit. They stayed because the house was comfortable all year. That’s the part you live with every day.
Our TZO Homes collection gives you a high-performance design to start from, adapted to your site. If you’re planning something custom, see how we work. Either way, start with a conversation.
Frequently asked questions
Do energy-efficient homes really sell for more in Australia?
Cotality’s analysis of over six million homes found each additional NatHERS star was associated with around 1.3% greater value, and solar with around 2.7%. Case studies in the Cotality and REIA report show sales of 14% to 66% above comparable homes where performance was part of a well-designed home.
What is a NatHERS star rating?
NatHERS rates a home’s thermal performance from 0 to 10 stars, based on how much heating and cooling it needs to stay comfortable through the year. New homes must now reach 7 stars. Around 70% of established Australian houses are estimated to rate below 4.
Will I have to disclose my home’s energy rating when I sell?
In the ACT, yes. It has been required at sale since 1999. All states and territories have agreed a national disclosure framework, but timing differs. Queensland has no requirement yet, and Victoria’s rental standards start in 2027. Check your state government for the latest.
Is a Passive House better than a 7-star home?
A Passive House is built to a stricter, independently certified standard. It focuses on insulation, airtightness, high-performance windows and fresh air ventilation, and it is tested. The result is a home that needs far less heating and cooling, with steady, measurable comfort.
