Renters and buyers cannot make informed choices if they do not know how energy efficient a potential home is before they buy or rent it.
Most Australian households support mandatory energy efficiency labelling schemes for residential buildings. There is even stronger support for energy efficiency standards for rental properties.24 However, there is no national framework for reporting household energy efficiency at point of sale or rental.
In 2015, COAG Energy Council agreed a national collaborative approach to residential building ratings and disclosure that would enable home owners, buyers and tenants to understand, compare, value and act on the energy performance of existing and new residential buildings.25
The Trajectory for Low Energy Buildings project was approved by COAG in 2019 and sets out a pathway to a national framework for disclosing residential energy efficiency. The COAG National Energy Productivity Plan also supports improving residential building energy ratings and disclosure.26
Basing such a system on a single, agreed energy efficiency rating system would help people to understand, compare, value and act on the energy performance of existing and new residential buildings anywhere in Australia.27 This will help overcome barriers such as split incentives between buyers and sellers or landlords and tenants.
As well as improved disclosure of residential energy performance, the Trajectory supports minimum energy efficiency rental requirements, noting the benefits of this initiative in resolving the split incentive that exists between landlords and tenants. In line with this approach, Victoria has introduced reforms to its Residential Tenancies Act providing for minimum efficiency standards.
For low-income households and associated rental properties, raising these standards will help realise broader quality-of-life benefits. Funding assistance programs to support these upgrades will be important, ensuring the costs of upgrades are not passed on to tenants through increased rents.
The Trajectory also notes the opportunity to consider how energy efficiency obligation schemes, financial incentives such as rebates, and Australian Government and state and territory tax incentives could best be coordinated to support these initiatives.
For more information on how standards for homes and buildings can increase energy efficiency (for example, the National Construction Code), see the Sustainability and resilience chapter.