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New green rankings have many seeing red

Some say it’s a reality, others disagree.

However, whichever stance you take, the powers that be have decided they can no longer ignore the debate around climate change and environmental sustainability.

We all know of the much maligned carbon tax that’s close to being introduced by Julia Gillard and crew, but less talked about is an energy performance rating system that the federal government wants to impose on all homes for rent and sale.

How energy efficient is it?

According to a report by the ABC, the idea is to allow buyers and tenants to make more informed choices when it comes to the house they plan on purchasing or renting and how much it might cost them to heat and cool.

Scores are awarded according to the home’s energy efficiency, with zero meaning the building does little to provide shelter from the elements (apart from the obligatory roof and four walls), while 10 means occupants can enjoy ideal temperatures without even needing to flick a switch at all.

The rating system the government proposes is based on one that has been used in the ACT for more than a decade now.

It is mandatory to disclose energy ratings on all homes in the nation’s capital because Canberra has the biggest temperature range out of every Australian city – reaching up to 40 degrees in summer and getting down to a frosty minus 8 degrees in winter.

How much does it cost?

The rating costs ACT property owners around $150 per home.

The proposed scheme would be introduced in addition to the current requirement for all new homes built in Australia to meet a minimum energy efficiency rating, of six stars across most states and territories.

Not everyone agrees

Some states flat out oppose the move to rate established dwellings.

Victorian Planning Minister Matthew Guy has publicly denounced the idea, calling it “yet another hair-brained tax idea from the Federal Government”.

While some believe the scheme to be worthy of exploration, there are concerns surrounding the reliability of the current rating system in the ACT and using this as the basis on which all Aussie homes would be ranked.

ACT-based energy ratings assessor Jenny Edwards supports the idea of rating older homes in order for the public to make more informed choices when deciding where to live.

However she points out that when she purchased her own home in Canberra’s inner-south, which was rated at three stars, the reality of living there was closer to one star.

“The first winter was freezing and the first summer was sweltering. (It is an) incredibly uncomfortable house to live in,” she said.

As the assessment is only based on a visual check of obvious features that might add to or compromise the energy efficiency of a property – such as orientation, window size and insulation – many experts suggest it is an inaccurate reflection of the true energy rating that can be gained from measuring things such as air leakage.

“We can’t take all the lining off the house and check the insulation has been thoroughly and evenly installed or that there are R2 batts and not R1 batts; that there aren’t big gaps in the house and assessing for air leakage is not something you can do quickly and superficially.”

Another issue, she says, is the lack of training required to become an assessor and the ease with which outcomes can be manipulated.

Ms Edwards says a national rollout of energy ratings to older homes is not straightforward; “There is a lot of potential for issues. And how we resolve that is complicated.”

One thing is certain, given the level of criticism leveled at the government proposal, it will not be introduced as originally scheduled.

Parliamentary Secretary for Energy Efficiency, Mark Dreyfus, says he cannot put a timeline on the plan to rate every home in Australia for its energy efficiency.

“Like a lot of state and federal programs it is not moving as quickly as I would like,” Mr Dreyfus said.

Regardless of whether this energy efficiency rating system takes effect for Australian properties in one month or ten years, the message to investors is clear.

As has always been the case, it pays to make sure you maintain your rental properties to the best standard possible to ensure it provides a good level of comfort to your tenants and therefore maximises your rental income.

And if you want to add value, be as energy efficient as possible!



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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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