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How much would you value a rating for your home? What if, just by getting that rating, your house become more valuable?
Aside from the extra confidence you’ll gain from having another professional look at your home, and of course, all the comfort and health benefits you’re likely to get from having a ‘good’ home, there’s growing evidence around the World that ratings add value – real, monetary value, to your property.
Who doesn’t want that?
In this week’s podcast, I discuss four pieces of evidence that I’m familiar with, all of which indicate that there is monetary value in getting a rating for your home.
Do you know of other relevant studies or evidence? Leave a comment below. I’d love to hear your thoughts.
California
The state of California may seem an odd place to look for comparisons with New Zealand homes, or others around the world. But like many housing matters, we have a lot more in common than in difference.
A study published in 2012 by NIls Kok and Matthew Kahn from The University of California explains that the average sale price of a home in California is around $400,000 and the average monthly utility bill across the state is about $200 per month. Not too far off NZ averages.
The bottom line of their report was a staggering 9% premium for properties that had any one of three typical home performance ratings.
If you knew you might sell your house for 9% more, simply by having a performance rating, that could help justify up to $38,000 worth of investment into your home.
Australian Capital Territory
A 2008 report from the Australian Capital Territory (ACT) shows a significant, positive correlation between energy star ratings and house resale value. Infact one half star improvement could net a 1.9% increase in sale price, or about $4,500.
Once again, this could go along way to helping to justify that insulation top up, or retrofitting double glazing to a few windows.
Havelock North
Closer to home in New Zealand, Horvath Homes built a 6 Homestar rated house in Havelock North in 2013. Branded as ‘Best Home‘ Horvath estimated that it cost about 5% extra to build this house, compared with a regular, code compliant house in the same area.
The house was valued by Telfer Young to be worth 10% more than a standard home without a Homestar rating. And it must have been attractive because the show home has already been sold.
Auckland
In preparation for implementing Homestar in the Unitary Plan, Auckland Council commissioned some research in 2013 to find out what the cost implications might be of requiring 6 Homestar ratings for homes in Auckland.
Jasmax estimated that taking a standard, 3 bedroom house plan from a code compliant 4 Homestar to a comfortable, efficient 6 Homestar would cost about 1.2%, or $6,400. Interestingly, about half of that was for a installing and plumbing in a rainwater tank, which you don’t technically need to achieve 6 Homestar.
The payback on this? Well it’s bit early to say how the market will value the verified warmth, comfort and efficiency, but a secondary report suggested that the investment would pay for itself purely in energy and water savings, well within the average 7 year cycle of home ownership.
The Bottom Line
Spending money on our homes can be an interesting mix of emotional drivers and logical justifications.
I’m confident that international trends provide a road map for where we’re headed in New Zealand and as rating tools such as Homestar mature, it’ll become easier for us to justify good investment in order to make good homes.
How much would you value a third party verification of your home’s green credentials? Leave a comment below.
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