Our RMIT Centre for Urban Research colleagues Nicola Willand and Trivess Moore respond to this important question in this weeks Conversation.

The required energy-efficiency rating of new housing in Australia will increase from 6 to 7 stars from October next year. Some claim this will greatly increase housing costs. But is this true?

Costs for new home owners are the sum of three things:

  • capital costs to build the home
  • costs to heat, cool and live in the home
  • mortgage costs.

The focus has been on the upfront capital costs of new homes – over a million are expected to be built over the next three years. The costs of living in the home and impacts on mortgage payments are neglected. Given the move to 7 stars will cut energy use for heating and cooling by about 24%, the cost savings will outweigh any increase in mortgage repayments in many circumstances.

And there are simple ways to achieve a 7-star rating on a budget, as they explain.

Will 7-star housing really cost more? It depends, but you can keep costs down in a few simple ways