Advancing new home sustainability through demand-side empowerment

Australia’s housing stock is often categorised by its lack of sustainability and energy efficient performance, with only four in five houses being built to the minimum standards and a negligible proportion to an optimal performance standard of 7.5 stars (based on the nationwide rating scheme NatHERS) or more (Moore et al., 2019). Residential buildings create about 12% of Australia’s Greenhouse gas emissions (Fyfe, 2019); consume 24% of Australia’s electricity (Commonwealth of Australia, 2022); and over a new dwellings’ lifetime the combination of emissions at construction and in operation of a single home is responsible for approximately 545 tCO₂e by 2050 (Schmidt et al. 2020).

The system delivering environmental performance for new dwelling construction in Australia is in disarray; stemming from a poorly designed and implemented regulatory approach to sustainability (Pitt & Sherry, 2014). Recent changes to the building code to increase energy efficiency performance to a 7-star NatHERS does assist in generating a stronger baseline for minimum performance. However, this multi-billion dollar industry created a total of $31 billion of new residential building in 2022 (IbisWorld, 2022) and approximately 200,000 dwellings per annum (Yardley, 2021); yet as an industry fails to deliver quality more sustainable and affordable homes (Burke, 2011; Jewell, 2015). The consumer or user (new homebuyer) is the one who bears the brunt of the costs; the initial upfront investment - one of the largest single investment consumers will make, and the long-term higher operational and social costs over a minimum fifty-year timeframe. The new homebuyer is often the scapegoat for the poor adoption of sustainability, labelled with the blame for a lack of interest, adoption and willingness to pay, by various stakeholders in the construction supply chain, including: developers, builders, architects, planners, designers, surveyors and product suppliers (Pitt & Sherry, 2014). Given new homebuyers’ limited knowledge of the residential building process and sustainability opportunities in new homes; the ability of new homebuyers to know and ask for sustainability initiatives is constrained and perceived as a lack of awareness and interest by supply stakeholders.

Homebuyers’ current approach to building a new home is mainly through volume builders who dominate the market for new housing, e.g. Simmonds, Metricon, J.G. King. This powerhouse of providers, is considered to have the characteristics of an oligopoly and is essentially the fundamental client (Coiacetto, 2006); telling homebuyers what they want, how they want it and do this by providing a limited profile of choice to maximise efficiencies of scale and profits (Reardon, 2013). The homebuyer is not without their wants or needs but is strongly guided by professionals in the process. Consequently, the volume builders drive homebuyer decisions in the new home market. In current practice the homebuyer has limited, power to choose sustainable options and embrace the benefits of sustainability. The power wielded by volume builders overshadows the ability of homebuyers to demand sustainability, as homebuyers are not an empowered consumer in regard to sustainability nor the building process. This research seeks to understand how do volume home builders communicate sustainability characteristics and inclusions, more sustainable homes, or sustainable options for new homes to consumers, and whether this may be one of the barriers to broader uptake by consumers of more sustainable and energy efficient homes.

This research agenda is two-fold, firstly, earlier research has explored opportunities for empowering homebuyers, through knowledge, understanding and opportunity to choose more sustainable characteristics. Secondly, evaluating the volume home builders from an organisational perspective and their communication and engagement with consumers through various formats.

This research investigates the transparency of sustainability discussion, knowledge sharing, documentation provided during the new home purchasing process. Identifying informational knowledge gaps and examining opportunities to improve, with outcomes of the research assisting the volume housing market to better communicate and engage with consumers and drive greater demand for more sustainable and energy efficient homes.