3 sustainability trends influencing the housing market in 2023
More consumers are looking for sustainable finance options. Here's what you need to know.
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Sustainability is a hot topic. Finder's Green Report found that over the last year, nearly 9 in 10 Australians have reduced their environmental impact in some way.
This extends beyond the more straightforward green initiatives, too, such as reducing litter. It also extends into where – and how – we live.
Reports such as the 2022–2025 Housing Outlook: Green Edition, commissioned by QBE LMI, indicate wider consumer interest in more sustainable housing.
With this in mind, we take a look at 3 sustainability trends influencing the housing market this year.
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1. Sustainable mortgages and lenders' mortgage insurance
Green home loans – and attendant financial products – have begun to arrive in the Australian market.
These can take a number of forms. For some providers, it's a home loan that's funded via investment in green projects and infrastructure.
For others, it's a loan provided conditionally on the basis of building or renovating a home that incorporates eco-friendly features. A homeowner might take out a loan to install solar panels or undertake a renovation using sustainable/repurposed materials.
Some financial providers are also offering deals or providing interest rate discounts on these green loans.
QBE LMI has also recently launched a 5% rate discount on lenders' mortgage insurance (LMI) to its participating exclusive partners, designed to help increase affordability of green home ownership.*
The 2022–2025 Housing Outlook: Green Edition notes that green home loan products are still in their relative infancy. However, it seems likely that we'll see an increasing number of green home loan products evolve as more lenders enter the field.
2. Savings on longer-term costs
A lot of the conversation around sustainable finance has tended to focus on the fact that it's better for the wider environment.
But it's also important to note that it can offer benefits at an individual level, too.
For example, the 2022–2025 Housing Outlook: Green Edition found that Australia tops the world for solar rooftop uptake.
Around 30% of all homes across the country have some variety of solar panel installed. In turn, this can lead to significant energy cost savings over time.
Renovations that install features like double glazing, lighter-coloured roofs, energy-efficient appliances, LED lights and solar panels aren't just for aesthetic purposes.
Rather, they can also save you money in the long run by reducing overall running costs.
Similarly, using repurposed materials can also allow you to save cash on new materials, too.
By working with a loan provider that offers sustainable finance solutions, you're not just choosing a more eco-friendly route. You can also help make your home a more financially sustainable place to live in.
3. Increased value for homes and investment properties
Choosing to make your own home greener isn't just about being more environmentally friendly. The 2022–2025 Housing Outlook: Green Edition found that making a property sustainable can actually enhance its overall value.
Studies compiled for the report found that energy-efficient homes were actually valued 5-10% higher than comparable homes without sustainable elements.
It's important to note that a number of different factors play a part in increasing the value of a property.
The Report highlighted tangible improvements, like sustainable renovations and construction.
For example, you might choose to install solar panels and double glazing or opt for a light-coloured roof. Using reclaimed materials during construction can also be a great way to make your home a bit greener, too.
Improvements also need to be tailored to your specific situation, too – a home that spends all year in shade may not be a good fit for solar panels.
However, these are considerations that are likely to grow in importance in future years. Green tech will continue to improve and the conversation about sustainability will continue to expand.
So by having conversations with the right finance providers and leveraging tools such as LMI, you may well be able to set yourself up for success with sustainable finance in future.
Visit the QBE LMI hub to learn more about LMI today.
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