Home Values

When people think about electrifying their homes, the usual motivations include reducing energy bills, improving comfort, and lowering emissions. But there's another compelling reason that’s becoming increasingly clear: Electrification increases property value.

In a market where buyers and renters alike are seeking homes that are cheaper to run and healthier to live in, energy-efficient upgrades are delivering strong financial returns — not just on your power bill, but when you sell.

What the Research Says

A number of studies shed light on the value that energy-efficient homes bring:

1. Cotality Watt’s-it-Worth study (2025)

Cotality used a regression based statistical model to quantify the relationship between property value and presence of a solar system and estimated AntHERS star ratings. 

The key findings are:

  • In Melbourne the presence of a solar system adds 2.8% or $24.4k to a home’s value

  • In Melbourne an additional estimated NatHERS energy efficiency star adds 1.1% or $8.2k to a home’s value

Note that this analysis uses a strong methodology that controls for other market characteristics such as location,  land size, dwelling type and floor area.

2. ACT Home Values Study (2011–2016)

A joint study by the University of Melbourne and University of Cambridge reviewed over 30,000 home sales in the Australian Capital Territory (ACT). Using a detailed property data analysis, and controlling for other characteristics, researchers found that energy-efficient features had a measurable effect on home values and rental income.

Key findings:

  • Double glazing added a 10% premium to sales price.

  • Reverse-cycle heating brought a 5.2% increase.

  • Solar PV systems led to 2% higher home values.

  • Gas heating had a negative impact on value and rental yield.

  • Homes with a 7-star energy rating sold for 9.4% more.

3. Domain Sustainability in Property 2025

This national report from Domain reveals a growing demand for green features across Australian real estate.

Key Melbourne highlights:

  • Houses marketed with energy-efficient keywords sold with median price of 23.8% more — about $197,000 on average.

  • For units, the premium was 17.8%, or $95,000.

  • In Boroondara, homes in Kew and Hawthorn saw even higher value increases of 34.4% and 32.8%, respectively.

  • Solar, eco, north-facing, and double glazing were among the most searched features.

Note that the Domain analysis does not control for other characteristics such as location,  land size, dwelling type and floor area.

 Feature Spotlight: What Adds Value?

Let’s break down the key upgrades that boost both liveability and market value:

Solar PV

  • Widely understood to lower energy bills.

  • Now also shown to increase home value: by 2.8% in Melbourne.

  • Enables EV charging and battery storage, increasing appeal to future buyers.

Reverse Cycle Heating and Cooling

  • Energy-efficient and gas-free.

  • Can add value to a home as shown in the Domain report

  • Also delivers higher rental returns — ACT data shows a 2.4% rent increase.

Double Glazing

  • Improves comfort and cuts heating/cooling bills.

  • Can add value to a home as shown in the Domain report.

  • Also linked to 8.1% higher rents in the ACT analysis.

Heat Pump Hot Water

  • Efficient and solar-compatible.

  • Uptake is growing — up 250% in Victoria over three years.

  • Will soon become a key selling point like solar, though currently under-reported in listings.

Additional Features on the Rise

  • EV Chargers

  • Home Batteries

  • 7-Star NatHERS Ratings

  • Gas-free / fully electrified homes

These features are fast becoming part of buyer wishlists, and as awareness grows, they’re expected to deliver premiums in the years ahead.

 

Renters and Landlords: Everyone Wins

Energy efficiency isn't just for owner-occupiers. Renters also value lower energy bills, and this translates into:

  • Higher rents for homes with solar, double glazing, and reverse cycle heating.

  • Government support: Victoria offers rebates and interest-free loans for rental providers who install solar PV — and renters can opt in to repay up to 50% of the loan, reducing costs for both parties.

 

Looking Ahead

The message is clear: energy-efficient homes are no longer niche — they’re becoming the new normal. As more properties boast clean, safe, and smart electrified systems, buyers and renters alike are learning to recognise (and pay for) the value.

For homeowners in Melbourne, the move toward electrification isn’t just about doing the right thing for the environment — it's a savvy financial investment.

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