Are Energy-Efficient Homes Worth More?

When it comes to buying a home, location, presentation and functionality have traditionally been among the biggest considerations. However, energy efficiency is becoming an increasingly important part of the conversation, with buyers looking beyond a property's appearance to consider how comfortable and affordable it will be to live in.

A new national report, The Efficiency Edge, released by the Real Estate Institute of Australia (REIA) and property data company Cotality, explores the relationship between a home's energy performance, buyer demand and property values.

The findings suggest that energy-efficient features may offer benefits beyond reduced household bills, potentially contributing to stronger sale prices and rental returns.

What the research found

The report examined properties with strong energy performance, highlighting examples where homes achieved sale prices above comparable local medians.

Across the case studies, some properties sold for as much as 66 per cent above their comparable local median, while one recorded a rental return 35 per cent higher than an alternative property inspected by the tenant.

Although these results are encouraging, energy efficiency was not the only factor influencing their performance. Location, design, condition and other property characteristics also contributed to the outcomes.

The research also highlighted growing interest in energy ratings, with 86 per cent of participants in Australian Government research considering this information important when buying a home, and 75 per cent when renting.

A closer look at Western Australia

Two Western Australian properties featured in the report, including a home in Mount Hawthorn.

The three-bedroom Mount Hawthorn property sold for $1.25 million in 2023, above the comparable local median at the time. It is now rented for $1,250 per week, compared with the suburb's median of $950 for three-bedroom houses.

Natural light, cross-ventilation and year-round comfort were among the features highlighted as contributing to the property's appeal.

Another example in Fremantle involved a three-bedroom townhouse that sold for $1.555 million in April 2026, approximately 22 per cent above the comparable median for three-bedroom townhouses in the area.

Buyer feedback indicated that sustainability was an important consideration in the purchase decision, demonstrating how energy performance can form part of a property's overall appeal.

What features are buyers looking for?

Energy efficiency doesn't necessarily require extensive renovations or expensive technology.

Features such as effective insulation, well-positioned windows, natural ventilation and energy-efficient heating and cooling can make a noticeable difference to a home's comfort and running costs.

Solar panels, efficient hot water systems, double glazing and thoughtful building design can also contribute to improved energy performance.

For buyers, these features may offer greater certainty around ongoing household expenses, particularly as electricity costs and broader living expenses remain important considerations.

For investors, a comfortable and efficient property may also appeal to tenants looking to manage their energy costs.

What does this mean for homeowners?

For homeowners considering improvements, energy efficiency is becoming another factor worth considering alongside presentation, functionality and general maintenance.

While not every upgrade will translate directly into a higher sale price, improvements that make a property more comfortable, practical and economical to operate may strengthen its appeal to prospective buyers.

It is also becoming increasingly valuable for sellers to highlight existing energy-efficient features when marketing their property. Solar installations, insulation, efficient appliances and passive design elements can all help demonstrate the benefits a home offers beyond its appearance.

As awareness of home energy performance continues to grow, these details may play a greater role in how buyers compare properties.

While location and presentation will always remain important, growing interest in energy efficiency suggests that a home's comfort, sustainability and running costs could become increasingly valuable considerations in Perth's property market.