How Much Is a Star Worth? Home Energy Claims from the Real Estate Institutes Tested
Caine and Pacifici: Energy Performance Is Becoming Part of How Homes Are Valued (O-261001-151738-MEDIUM)
Inflation (21220) +2.1049σ Q2 2026 · position 100.0, ranked against 22 quarters
Sustainability & Environmental Policies (21360) NIL RETURN
Scope and Purpose
In a September 2026 podcast with Cotality, Jacob Caine, President of the Real Estate Institute of Australia, and Chiara Pacifici, a Perth buyer’s advocate and councillor of the Real Estate Institute of Western Australia, set out how home energy performance is entering the sale and lease of homes. Their argument is carried in the companion Industry & Professional Bodies output, Caine and Pacifici: Energy Performance Is Becoming Part of How Homes Are Valued. It rests on seven checkable propositions: that most states have adopted a 7-star standard for new homes; that energy costs are rising sharply; that only the ACT has legislated disclosure, for about 25 years; that Victoria will set minimum standards for rental homes from March 2027 while New South Wales consults; that ACT data show a premium of about 2.4% at 6 stars and up to 9.4% at 7 stars; that heating and cooling, and hot water, are the main household energy uses; and that ratings for specific homes can be found online. This output puts each against its primary source and against Australian Property Network’s (APN’s) certified readings. The short answer is that the standards, cost, disclosure and rental-rule claims hold, with differences between states, and that the premium figures are genuine but come from an early study; later estimates are smaller.
Proposition One: Most States Have Adopted a 7-Star Minimum for New Homes
The 2022 edition of the National Construction Code raised the energy requirement for new homes to 7 stars on the Nationwide House Energy Rating Scheme (NatHERS), a scale from 0 to 10 that measures how much heating and cooling a home needs to stay comfortable, and added a whole-of-home budget for fixed appliances. Each state and territory adopts the Code on its own timetable. Six of the eight adopted the new provisions between October 2023 and May 2025. Tasmania has not adopted them, and the Northern Territory applies 5-star requirements only (Australian Building Codes Board). The claim holds: most, though not all, jurisdictions now require 7 stars.
Energy Settings for Homes, by State and Territory, September 2026
| Jurisdiction | 7-star standard for new homes | Rating disclosure at sale | Minimum energy standards for rentals |
|---|---|---|---|
| New South Wales | 1 October 2023, through BASIX | No mandatory scheme; a voluntary disclosure trial with the Australian Government | Consulted 28 April to 31 May 2026 |
| Victoria | 1 May 2024 | No mandatory scheme | Six standards in phases from 1 March 2027 |
| Queensland | 1 May 2024, through Queensland Modern Homes | No mandatory scheme | No energy-specific standard in force |
| Western Australia | 1 May 2025 | No mandatory scheme | No energy-specific standard in force |
| South Australia | 1 October 2024 | No mandatory scheme | No energy-specific standard in force |
| Tasmania | Not adopted | No mandatory scheme | No energy-specific standard in force |
| Australian Capital Territory | 15 January 2024 | At sale since 1999; at lease where a rating exists | Ceiling insulation to R5 from 1 April 2023; most properties by 30 November 2026 |
| Northern Territory | 5-star requirements only, from 1 October 2023 | No mandatory scheme | No energy-specific standard in force |
Sources: Australian Building Codes Board, NCC 2022 state and territory adoption dates (the Queensland date as stated by the Queensland Government); ACT Government; Consumer Affairs Victoria; NSW Government; Cotality and REIA, The Efficiency Edge (September 2026), for disclosure and rental settings where no instrument is in force.
The table sets out each jurisdiction’s position on the three settings the speakers discuss: the standard for new homes, disclosure of a rating at sale, and minimum standards for rental homes. APN’s Who Sets the Sustainability Rules for a New Home explains how the building standard is set and adopted.
Proposition Two: Energy Costs Are Rising Sharply
Electricity prices in the Consumer Price Index rose 13.2% in the year to August 2026 (ABS Consumer Price Index). The annual rate is distorted by the Commonwealth’s energy bill rebates, which the ABS records as price reductions while they are paid: over the past two years it has ranged from −35.6% in October 2024 to +37.1% in October 2025, and the ABS attributes most of the August rise to the end of the rebates. Measured instead from June 2024, before the rebates began, electricity prices rose 12.8% to August 2026, against 7.2% for all goods and services.
Electricity and All Consumer Prices, Index, June 2024 = 100
Source: ABS Consumer Price Index, Australia (6401.0), monthly, index numbers, original: electricity (Table 3) and all groups (Table 1), rebased to June 2024, the month before the Commonwealth energy bill rebates began. The ABS records the rebates as price reductions while they are paid, which accounts for the fall from July 2024 and the rise from January 2026. Electricity is shown in gold, all groups in slate.
The claim holds in substance: electricity prices have risen faster than prices generally, though by less than the annual rate suggests. Inflation (21220) reads +2.1049σ for the June quarter, the highest of its 22 full-coverage quarters.
Proposition Three: Only the ACT Has Legislated Disclosure, for About 25 Years
The ACT has required a home’s energy efficiency rating to be disclosed at sale since 1999, and at lease where the home already has a rating. The ACT Government’s 2023 review of the scheme found a rating in about 98% of homes advertised for sale, but in only about 33% of rental listings (ACT Government). No other jurisdiction requires disclosure. All governments have agreed a national Home Energy Ratings Disclosure Framework (energy.gov.au), and New South Wales and the Australian Government have trialled voluntary disclosure (Cotality and REIA). The claim holds: the ACT’s scheme dates from 1999 and remains the only mandatory one. The expectation that New South Wales could legislate disclosure by the end of 2026 is a forecast, and APN does not test forecasts.
Proposition Four: Minimum Energy Standards for Rental Homes
Victoria’s Residential Tenancies Amendment (Minimum Energy Efficiency Standards) Regulations 2025 take effect in phases from 1 March 2027. They cover heating, cooling, hot water, shower heads, ceiling insulation and draught-proofing (Consumer Affairs Victoria). New South Wales consulted on minimum energy efficiency rental standards from 28 April to 31 May 2026 (NSW Government). Both claims hold. The speakers did not mention that the ACT already has a rental standard in force: rental homes with no ceiling insulation, or insulation rated below R2, must be brought to R5, most properties must comply by 30 November 2026, and compliance must be stated in rental advertisements (ACT Government). Victoria’s standards will therefore be the second in force, not the first.
Proposition Five: A Premium of 2.4% at 6 Stars and 9.4% at 7 Stars
The figures come from a study of ACT property transactions from 2011 to 2016 by Franz Fuerst and Georgia Warren-Myers, published in Energy Economics in 2018. Against a 3-star home, it found sale premiums of 2.0% at 5 stars, 2.4% at 6 stars and 9.4% at 7 stars (University of Melbourne). The speakers describe it as one of the more recent studies. The citation holds, but later estimates are smaller.
Estimated Sale Price Premium Against a 3-Star Home, ACT Studies
Sources: Fuerst and Warren-Myers, Energy Economics (2018), ACT sales, 2011–2016, in gold; Review of the ACT Energy Efficiency Rating Disclosure Scheme (ACT Government, 2023), house sales 2000–2022 excluding new builds, in slate. The 2023 review reports no separate 7-star estimate; the ACT’s disclosure scale for established homes runs from 0 to 6 stars.
The ACT Government’s 2023 review, using house sales from 2000 to 2022 and excluding new builds, found premiums against a 3-star house of 1.9% at 4 stars, 2.7% at 5 stars and 1.5% at 6 stars, and a discount of 6.4% at 0 stars; the premium did not rise steadily above 5 stars. Cotality’s national analysis of more than six million homes, reported in The Efficiency Edge, associates each additional NatHERS star with about 1.3% greater value, and rooftop solar with about 2.7% (Cotality and REIA). Neither later estimate supports a step of 9.4% at 7 stars. The ACT’s disclosure scale for established homes also runs from 0 to 6 stars, so homes rated 7 stars in ACT sales are newer homes rated under NatHERS, and a 7-star premium may reflect their age as well as their energy performance.
The report’s headline figures of 66% and 35% come from single properties compared with local medians: a rural lifestyle property in Tasmania, and a newer, larger rental home in Canberra. They show that the difference can be large in an individual sale; they do not measure the premium across the market. The statement that the premium pays for the upfront investment in upgrades cannot be tested without upgrade costs, and is recorded as NIL RETURN.
Proposition Six: Heating, Cooling and Hot Water Dominate Household Energy Use
Heating and cooling account for about 40% of energy use in the average Australian home, and hot water for between 15% and 30% (energy.gov.au). The Australian Government estimates that raising a home from 3 to 5 stars cuts its heating and cooling energy by about 40% (Minister for Climate Change and Energy). The claim holds.
Proposition Seven: Ratings for Specific Homes Can Be Found Online
Pacifici says a home rated when it was built can have its rating found online through the CSIRO. The CSIRO’s Australian Housing Data portal publishes NatHERS certificate data as dashboards by state, climate zone, council area and postcode. The Australian Government’s homeenergyrating.gov.au provides home energy rating information, and NatHERS assessments of existing homes, the second stage of which began on 1 July 2026, add ratings for established homes as they are assessed (Cotality and REIA). The claim holds in part: rating information is becoming more accessible, but a rating exists only for a home that has been assessed, and about 70% of established houses are estimated to rate below 4 stars.
Not Tested
Accounts of what buyers and renters ask for, the supply of electric vehicles, and the effect of rental standards on rent roll values and insurance costs are the speakers’ observations from practice or their expectations, and are recorded as NIL RETURN.
APN Analytical Synthesis
Of the speakers’ seven checkable propositions, five hold: most jurisdictions require 7 stars for new homes, electricity prices have risen faster than prices generally, the ACT alone mandates disclosure, Victoria and New South Wales are moving on rental standards, and heating, cooling and hot water are the main household energy uses. The premium figures are accurately cited from a 2018 study but exceed the later evidence, which puts the premium for a well-rated established home at a few per cent. The claim about finding ratings online holds in part. Inflation (21220) reads +2.1049σ, the highest of its 22 full-coverage quarters. The data describe a market in which the rules on energy performance are tightening and running costs are rising, while the measured premium for a better-rated home remains modest; the evidence for that premium comes almost entirely from the one jurisdiction that has disclosed ratings for a generation.
The next data will test the argument: the ACT’s rental insulation deadline of 30 November 2026, the start of Victoria’s rental standards on 1 March 2027, the outcome of the New South Wales consultation, and the monthly Consumer Price Index. This synthesis speaks only to the structural conditions the cited data can independently support; it does not constitute a view on future property values, energy prices or government policy, and no such view is expressed or implied.
Disclaimer
The analysis and information contained in this publication are for general informational and strategic purposes only and do not constitute financial, investment, legal, or any other form of professional advice. Australian Property Network is not a licensed financial advisor. Property values and market conditions can go up or down. Before making any property or investment decisions, you must conduct your own thorough research and seek independent professional advice tailored to your specific circumstances.
