As sustainability becomes a growing focus in global real estate, a key question for agents is whether they should brace for an influx of demand for green homes, or if this trend is more driven by industry forces than by buyer preferences.
Sustainability on the Rise, but Cost Still Key for Buyers
While eco-friendly homes have gained traction in markets like the UK and the US, in Australia, sustainability remains more of a “nice-to-have” feature than a must-have for luxury homebuyers. For most Australian buyers, factors such as location, price, and lifestyle are the primary drivers behind purchasing decisions.
The Green Building Council of Australia (GBCA) has launched Green Star Apartments, a sustainability rating to help buyers, renters, and financiers identify eco-friendly properties. The initiative is based on research showing that Green Star-certified apartments can offer financial benefits of up to $111,000 over 30 years, due to cheaper loans, lower energy costs, and stronger capital growth. This rating system aims to make sustainable homes more accessible to Australians, offering both cost savings and environmental benefits.
The Rising Demand for Energy-Efficient Homes
Despite the ongoing focus on cost considerations, data suggests a growing interest in energy-efficient homes. According to Domain’s second annual Sustainability in Property Report, green homes receive 16% more listing views and spend 4% fewer days on the market, signaling an increasing demand for sustainability features. Interestingly, this shift is most evident among middle-income households, who are embracing energy-efficient features like solar panels and cross-ventilation, which provide both environmental and financial benefits.
Luxury Buyers: Sustainability Remains Secondary
While sustainable features are becoming more common in new developments, luxury buyers in Australia are not yet prioritizing sustainability. Simon Cohen, founder of Cohen Handler, noted that in the Sydney prestige market, energy efficiency and solar power are not commonly requested by buyers. He suggested that sustainability might be more prominent in new developments, but it hasn’t yet gained traction among high-end buyers, who tend to favor features like home automation over eco-friendly considerations.
International Trends: Sustainability Gains Ground in Luxury Markets
In contrast, high-net-worth individuals in markets like the UK and the US are increasingly valuing sustainable properties. In London, entrepreneur Pelham Olive is converting a historic Georgian townhouse into a BREEAM-certified green building, proving that luxury and sustainability can coexist even in heritage properties. Meanwhile, in the US, developers like Blue Heron in Las Vegas are creating solar-powered, tech-driven estates, while in Malibu, demand for 100% electric, renewable homes continues to grow. These properties not only emphasize eco-conscious materials but also prioritize well-being, with toxin-free interiors becoming a major selling point.
The Implications for Real Estate Agents
Although luxury buyers in Australia are not yet prioritizing sustainability, real estate professionals should be prepared for a shift. As younger buyers and investors increasingly focus on lower operating costs, eco-certifications, and future-proofed properties, the demand for sustainable homes is expected to grow. Real estate agents may need to educate buyers on the benefits of eco-friendly features, from reduced energy bills to healthier living environments, to stay ahead of the curve.
If global trends are any indication, the question is not whether sustainability will become a key selling point, but when. As sustainability becomes more mainstream, agents should be ready for a future where green homes are not just a trend, but a sought-after standard.
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