Advancing new home sustainability through demand-side empowerment: investigating home buyer decision-making

This research demonstrates the power wielded by the volume builders through their interactions with the supply chain and customers (new homebuyers), which could be channeled to create industry change through competitive marketing.  This research also investigates new homebuyers’ experiences in the home building process, in particular explore 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 an expectation it will influence homebuyers’ value-based decision-making.

The rationale for this research is 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).  This multi-billion dollar industry created a total of $31 billion of new residential building in 2014 and in excess of 180,000 dwellings per annum (ABS, 2015); 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, labeled 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.   However, if new homebuyers were empowered through knowledge, understanding and opportunity to choose more sustainable characteristics, this would drive a stronger sustainability focus in the residential sector creating better economic, social and environmental outcomes for current and future generations.

The homebuyers study is a concurrent project with the project examining the volume builders’ perspective of sustainability and innovation in the new home building process in Victoria.