NEWS FROM THE FRONT DESK: It’s time to set the record straight. The National Construction Code is on its way and yes, 7-star NatHERS rating is still on the cards, despite recent claims to the contrary. Of course it should be even higher, given the price of energy right now and our galloping climate catastrophes.
The result of the recent election was clear and unequivocal. Australians want action on climate change. The time has come for sustainable and affordable homes.
And with soaring fossil fuel prices creating a cost of living crisis, building energy efficient homes has never been more important, or urgent.
That’s not just the mood in the general public, it’s also the mood in the industry as well. (Well, at least the parts of it that are respectable and not trying to pull the wool over our eyes.)
Just like King Canute, the Housing Industry Association is trying to turn back the teal tide by continuing to defend low-quality, energy inefficient houses and apartments that cost a small fortune to heat and cool.
That can be the only logical reason this lobby group is trying so hard to stymie modest proposals for a better National Construction Code by Australian Building Codes Board, which is to increase the minimum energy efficiency standard for new homes in the NCC from a 6-star to a 7-star NatHERS rating.
In a recent article, the HIA sewed mass confusion and anger in the industry by claiming the seven star proposal had been dropped.
It claimed that “building industry ministers” had already “accepted its proposal” to “replace the planned move to a 7-star minimum NatHERS (nationwide house energy rating scheme) thermal rating” in the National Construction Code.
There is just one problem.
Here’s what Australian Building Codes Board chief executive Gary Rake told The Fifth Estate:
“That’s not accurate. Seven Star is still the proposal that we’re evaluating.”
Here’s what’s actually happening with the NCC
The Fifth Estate understands that Mr Rake briefed building ministers at the end of March on the ABCB’s progress with its analysis.
During that meeting, Mr Rake told energy ministers that there are cost effective improvements that can be made to energy efficiency through a move to seven stars, along with the whole home energy budget.
Earlier this week, the ABCB published its interim consultation report on the proposed improvements to residential energy efficiency.
In that report, the ABCB outlines some of the feedback it has received from public submissions, grouped by theme, and gives a short response on how it’s going to deal with that topic in the next stage of its analysis.
Once again, the introduction to that report explicitly says the ACBC is evaluating seven stars for both class one standalone buildings and class two apartments.
“Australians deserve better homes. We are absolutely delighted to hear that we are continuing a full and thorough process for NCC 2022 and look forward to continuing to engage throughout this process,” Green Building Council of Australia chief executive Davina Rooney told The Fifth Estate on Thursday.
“We’re extremely pleased that Gary Rake has provided clarification on the latest status, because it’s important that we’re all clear as policy processes progress.”
What’s left to be done on the NCC
Most of the new provisions in the NCC were published in the ABCB’s May preview. That means people can now see most of the new provisions, including the new accessible housing liveable and housing standards.
The two remaining decisions that are yet to be finalised are on energy efficiency and condensation.
At this stage, The Fifth Estate understands the ABCB currently anticipates its final advice will be presented to ministers in July, after the new federal minister sends out an invitation to colleagues.
If a ministerial decision is reached in July, it would be written into the code by 1 September.
The other question the ABCB will work on, in partnership with the states and territories, is the transition timeframe.
There will be a mandatory “no later than” adoption date.
The Fifth Estate understands that ministers are aware this is a big revision of the code with major changes in accessible housing and residential energy efficiency. This will be a big factor in determining the adoption date timeline.
“We’re working with states and territories on options for transition. We obviously want to get the benefit to consumers as quickly as we can. But we need to do that at a pace that industry can safely and properly respond to,” Mr Rake said.
“Some of the important related matters for energy efficiency that ties into the development of a new NatHERS energy tool and making sure that that’s available in the market, and that work is well progressed.
“And it’s making sure that the rest of the supply chain can be aligned. So we want to make these changes as soon as we can but at a sensible pace for industry.”
Running costs are lower at 7 stars
The HIA has also claimed that retaining a 6 star NatHERS energy standard with whole-of-house energy use in the NCC would be “more cost-effective for the builder and for the running costs of the home for the owner”.
Again, we know that’s just not true, and there’s solid, detailed economic analysis to back that up.
Even before the massive recent energy cost increases, living in a 7 star, all-electric house in any Australian capital city saves residents an average of $450 per year on their heating and cooling bills, compared to the current 6 star standard.
The savings are even greater in cities with hotter Summer climates, with Darwin and Canberra residents keeping an extra $945 and $713 in their pockets each year, respectively.
While building a 7-star home is currently slightly more expensive upfront than a standard six-star home—an average of around $2300—that difference is repaid in less than six years.
Keep in mind that those are the prices today, without a 7-star NatHERS NCC standard in place. Economies of scale mean that once a 7-star standard becomes the norm, that upfront price difference will come down.
Now here’s the thing. Unless your surname is Musk, Gates, Buffett or Bezos, you most likely are not going to pay for your house upfront with cash. You’ll get a 30-year mortgage.
Certainly very few people who are buying a home from a HIA member are doing it without a mortgage!
A very sensible solution
Finally, if a 7-star standard will cost an extra $2300 on average (repaid over a 30-year mortgage), and saves residents an extra $450 each year, then there’s a really simple solution.
The federal government could simply step in and provide an interest free loan to residents covering the cost difference, which would be repaid by residents through energy savings.
As one of Australia’s top energy experts, Alan Pears, pointed out back in April, such a program is very similar to what the federal government already does with the First Home Buyers Scheme.
And, frankly, pushing such a scheme would be far more productive for the HIA than spreading confusion through the newspapers.
The teal tide has rolled in. Australians deserve better homes.