Most people looking to buy a home have a checklist—number of bedrooms, local schools, backyard space. But for a growing number of Australians, that list now includes solar panels, water-saving features, and high-efficiency appliances. Green home features are no longer niche. They’re becoming a mainstream consideration, especially among first-home buyers and young families.
But how exactly do these eco-friendly features affect what banks and lenders think your home is worth?
What Lenders Look For
When a lender assesses a property, they’re not just looking at size and location. They’re interested in overall value and how easy the home would be to sell if the borrower defaults. This is where green features come into play.
Homes with sustainable upgrades—like solar energy systems or double-glazed windows—often have lower ongoing running costs. That means the home is potentially more affordable for the owner to live in, making it slightly less risky in the eyes of some lenders. In some cases, this can result in better borrowing conditions or even slightly higher valuations. But it’s not always guaranteed.
Energy Efficiency and Its Valuation Impact
One of the most commonly asked questions is whether solar panels increase a home’s value. The short answer: usually, yes. Properties with solar installations are often appraised more favourably, especially if the system is owned outright and not under a lease.
Energy-efficient homes can also come with higher NatHERS (Nationwide House Energy Rating Scheme) ratings. A higher energy rating can be a key point of difference, particularly in new builds and renovations, and may play a role in increasing a lender’s confidence in the property.
However, while energy savings are attractive, valuation processes are still relatively conservative. Lenders typically rely on comparable sales in the area. So, unless nearby homes with similar eco-features have sold recently, the valuer might not assign significant extra value to sustainability elements.
Water Conservation and Smart Design
Features like rainwater tanks, greywater recycling systems, or drought-resistant landscaping can help reduce water bills and environmental impact. These additions are increasingly relevant in parts of Australia affected by water scarcity. While these might not drastically affect the lender’s dollar valuation, they can add appeal for buyers and play a role in faster resale.
Design features like passive cooling, effective insulation, and good cross-ventilation also contribute to energy efficiency. They reduce reliance on air conditioning and heating—further improving the home’s liveability and reducing ongoing costs.
Are Green Homes Easier to Finance?
This is where things can get a little more nuanced. Some lenders have introduced “green loans” or discounted mortgage rates for homes that meet specific environmental standards. These offers are not yet widespread but are growing in popularity as the focus on sustainability intensifies.
For buyers who are considering sustainable homes or planning green renovations, speaking with a Sydney mortgage broker who understands these loan products can be a smart move. Brokers with knowledge of both traditional and green home loans can help identify lenders who are more favourable toward eco-upgrades.
The Future of Green Valuations
While Australia is still catching up to some overseas markets in terms of how sustainability is factored into property values, change is happening. The Property Council of Australia and other bodies are pushing for clearer frameworks to evaluate green buildings. This includes standardising the way energy efficiency and sustainability are measured in property reports.
As these systems become more widely adopted, lenders are likely to place greater weight on environmental features. It’s not just about being trendy; it’s about long-term cost savings and improved asset performance.
What Buyers Should Keep in Mind
If you’re in the market for an eco-conscious home—or thinking of upgrading your current home to make it more sustainable—here are a few tips:
- Get documentation: Keep records of all sustainable features, including energy ratings, solar power output, insulation details, and water-saving features. These can support the valuation process.
- Talk to the right professionals: Conveyancers, valuers, and mortgage brokers who are familiar with green property features can make a big difference. A knowledgeable Sydney mortgage broker can point you toward lenders who factor eco-features into their assessments.
- Be realistic: While green upgrades can improve liveability and reduce long-term costs, they may not always translate into a significant boost in valuation today. Focus on the practical benefits and growing future demand.
A Greener Outlook
Sustainable homes are here to stay, and both buyers and lenders are beginning to treat them more seriously. While we’re not yet at the point where every eco-upgrade adds thousands to a valuation, the tide is turning. The more we integrate sustainability into the way we build, live, and finance our homes, the more value—monetary and otherwise—these features will hold.
It’s a smart move for the planet, and increasingly, a smart one for your wallet too.
