INTHEBLACK August 2025 - Magazine - Page 36
F E AT U R E
READ
an article on
Australia’s
housing crisis
EXPLORE
CPA Australia’s
range of ESG
short courses
LISTEN
to this story
36 INTHEBLACK August 2025
Fabar. This disconnect highlights how
housing size influences sustainability
and affordability.
Recent green financing initiatives hint
at progress. For instance, Bank Australia
supports green homes through its clean
energy home loan.
“We use our standard valuation practices
for all our home loans, including for green
homes, which involves independent-valuation
firms assessing the property at a value
dictated by the market,” says Jane Kern, Bank
Australia’s head of impact management. “Our
clean energy home loan provides customers
with a reduced interest rate for up to five
years as an incentive to buy or build energyefficient homes.” Kern believes mandatory
climate disclosure for companies may prompt
more banks to offer support for green homes.
“Better information for home buyers
on a home’s energy efficiency might drive
increased valuations for green homes in
future. Disclosure of energy ratings when
a home is for sale could also help people
factor that information into how attractive
a property is,” she says.
In an effort to boost housing supply,
the Commonwealth Bank has recently
announced a prefabricated housing policy
update with prefabAUS. This means
customers can access progress payments
before a prefab property is fixed to land,
instead of having to fund up to 90 per cent
of the upfront costs themselves, as was
previously the case. As they are quick
and easy to build, prefab homes are likely
to be part of the solution to the housing
availability and affordability challenge.
While valuers may reject the idea of
considering a home’s green credentials,
property data shows sustainable properties
sell for more than their less environmentally
friendly counterparts. Research by
real-estate company Domain indicates
energy-efficient houses attract an average
premium of A$112,000, while energyefficient units attract a premium of A$70,000.
This disconnect stifles demand. “Until
valuers recognise energy performance
metrics, we’ll keep churning out inefficient
homes,” Fabar says.
Over time, there is an opportunity
to better embed sustainability criteria into
lending practices. “Finance drives scale.
Banks must require certifications like
Green Star,” Monavari urges.
TRIED AND TRUE SOLUTIONS
For Jeremy McLeod, founder and design
director of Breathe Architecture, Australia’s
housing crisis is compounded by a triple
threat of climate collapse, unaffordable
sprawl and a loneliness epidemic.
“We’re building bigger houses further apart
in car-dependent suburbs, while ignoring
housing solutions that worked for centuries,”
he says. McLeod points to terrace housing
in Melbourne’s Fitzroy or Sydney’s Surry Hills
as models of efficiency and community, and
proof that size-efficient designs and climatesmart solutions can coexist.
McLeod’s projects like The Commons
and Nightingale 1 in the Melbourne suburb
of Brunswick adopt what he calls
an architecture of reductionism, which
is an approach to design that rests on
simplification. This involves building only
what is needed and incorporating shared
facilities into the way homes are designed,
such as communal laundries and rooftop
gardens to reduce embodied carbon.
“Every square metre we don’t build saves
1.2 tonnes of carbon dioxide. Why
prioritise garages over gathering spaces?”
McLeod argues.
CALL FOR CHANGE
The public sector’s role is key in supporting
more sustainable building practices. While
the GBCA helped shape the 2022 updates
to the National Construction Code,
implementation of the code remains patchy.
“National consistency is key. Builders
struggle when standards vary,” says Monavari.
Similarly, McLeod highlights regulatory
inertia in suburban planning. “Victoria’s
standards still prioritise double garages over
duplexes,” he says.
Carbon pricing could also help
revolutionise green building, says McLeod.
“If we taxed carbon, building a 100-squaremetre home instead of a 200-square-metre
home would save emissions and costs.
Suddenly, small becomes smart economics.” ■
