Why sustainability still pays in housing
The market may have cooled on ESG, but not on green homes. Energy performance is emerging as the new metric driving property prices and lending decisions.
You’d be forgiven for thinking no one cares about sustainability anymore. “ESG is dead” has become the market cliché of 2025. But in housing, the data says otherwise.
Recent analysis by Cotality shows that investing in a home’s sustainability makes financial sense. Our “Watt’s it Worth” report found that adding one star (on a 1–10 scale) to a home’s energy efficiency rating adds around $10,000 in value, while installing solar panels lifts value by more than double that ($23,100).
Across Australia’s 5.5 million detached homes estimated to be below 6 stars — 7 stars being the current national construction code minimum for new homes — a one star nation-wide efficiency improvement program could add more than $50 billion in value. Bringing those homes up to NCC levels would push that figure many times higher.
Is that likely? The federal government is moving towards mandatory energy disclosure, requiring all homes to publicise their energy rating at the point of sale or rental. Market forces are already pricing energy performance into property values and regulation is catching up. This could turn an emerging trend into a force of nature.
