Award winning author Michele Powles may not have any house building experience, but she and her family are learning fast.
After buying a section in West Auckland last year, Michele and her husband James started the daunting building process and wrote about their experience on a Stuff blog How to build a house and on her website Building Boxes.
As she explained to REDnews recently, building a sustainable house on a budget is possible, but when it comes time to sell, will you make back the extra money you spend?
Early signs point to yes
Studying the impact that sustainably built homes have had on the housing market in New Zealand is difficult. There just aren’t the volume of properties here that there are overseas.
Reports out of the UK certainly indicate that there is a resale premium on homes with energy efficient technologies, like better insulation, boilers, and solar panels.
SEE ALSO: What's the cost of building green?
And apparently New Zealanders too think it will make a difference, as 88% of people surveyed in a recent study by Homestar and RealEstate.co.nz believed that there is a price premium on homes that demonstrate energy, water, and heating efficiency.
But what of sustainable principles like passive design? Could the cost of integrating these bigger sustainability principles create a return on resale?
What Kiwis rate as ‘important’ or ‘very important’ in a house
Some materials add more value than others
When we started planning our new build, we wanted to include as many sustainable and energy efficient principles as we could afford. But after only a short foray into working through many options, it became clear that there was definitely a significant cost associated with including them in our design. Part of that was to do with our site – it’s steep, and while it is drenched in Northern and Western light, the view (which we love) is to the South.
The difficulty is that while including some energy efficient materials, especially in a new build, doesn’t necessarily add to the bottom line, others do come with a bigger price tag.
Insulating the walls as well as ceiling and floor, for example, will only add a tiny percentage to a build budget, but will make a big impact on the overall efficiency of the house and more New Zealanders perceive this will add value when it comes to resale.
However, bigger ticket items like thermally broken windows and solar panels come at a cost of tens of thousands of dollars. If you’re planning on living in your home for the long term, the payback period renders many of these issues irrelevant as you should see a return.
But will it increase your house price?
The question, however, is whether home buyers notice the difference of these big ticket items when it comes time to buy. Paul Chapman from the Belvedere Group who have just built New Zealand’s first 10 star Homestar house, estimates that there will be a 9-10% premium increase on properties with eco features in their higher rated Homestar new builds. And figures from Homestar also estimate that this will be the case.
But the reality is that at the moment this is all pretty much speculation.
Speaking with the team at TradeMe Property, it became clear that it’s very tough to work out the real rate of return that increasing a property’s sustainable features will bring to a New Zealand home at present.
Real estate agents are mindful that they need to be careful in describing a home’s attributes so as not to be exposed under the Real Estate Agents Act, and there are relatively few homes where sustainable attributes, such as passive heating, are identified and can therefore be used in listings.
Still early days
It seems we’ll have to wait a while before real data can be generated to work through actual resale rates of return, and let’s not even talk about how the current Auckland market might affect the results.
However, one comprehensive study out of the USA notes that returns on sustainable building materials (in this case solar panels) bring not only investment value (around 3-4% increase on return), but also consumption value. So consumers felt a “warm glow” or pride in producing energy which was just as important to them as the rate of return.
Whether the rate of return for sustainably built homes in New Zealand provides a pay out comparable to overseas markets is yet to be seen, but if you’re building your forever home, it seems likely that building green, to your budget, is a sensible investment.
SEE ALSO: What's the cost of building green?
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