Sustainable and Green Developments - Benefits for Investors

Sustainability is not just a buzz word in the construction and real estate industry - energy-efficient homes and features are preferred, and are becoming the new expected by new home owners in 2025.

According to the Australian Housing and Urban Research Institute, 82% of new Australian homes now meet the new 7-star NatHERS rating for thermal efficiency. Compared to the median 2.8-star rating for homes built prior to 2010 (data from CoreLogic), the construction industry has come a long way in ensuring energy efficiency of new builds.

The rise of environmentally friendly constructions provides clear advantages for investors. Beyond eco-conscious benefits, sustainable or green property developments hold stronger resale value and rental appeal. 

The Demand For Sustainable Homes in Australia  

The 2025 Sustainability in Property Report found that energy-efficient homes are in demand across Australia. The report found that energy-efficient homes spend 4% fewer days on the market and experience 16% more listing views. 

So, what defines a ‘sustainable’ property? In short, sustainable homes are designed for long-term energy efficiency and year-round comfort. Depending on which green-rating system is used to assess the property (there are many), the home may come equipped with energy-efficient appliances such as solar panels or have a high level of thermal insulation. 

The bottom line is that a green home must be designed to have a minimal impact on the environment - whether it’s by reducing energy consumption or leveraging renewable energy.

Benefits of Sustainable Properties for Investors

Higher Appeal for Potential Tenants

Energy-efficient homes will be more comfortable all year round, which is a sought after feature for tenants. Demand for energy-efficient homes in the warm Queensland climate is especially high - occupants favour housing options that keep the home cool without the excessive use of air conditioning.

The appeal for energy-efficient homes translates to increased demand from tenants and buyers. On average, energy-efficient homes are selling for $118,000 more than non-energy-efficient homes (Sustainability in Property Report, 2025).

Long-Term Energy Savings

An energy-efficient home helps owner-investors save money on the electricity bill. This contributes to lower ongoing costs and maximises rental yield.

If the electricity bill is paid by tenants, energy-efficient upgrades like LED lighting and solar systems offer potential tenants the benefit of lower electricity costs, which enhances the property's appeal.

Tax Depreciation

Investors can claim plant and equipment depreciation on energy-efficient appliances like solar panels and insulation. The tax deductions can be applied to reduce overall taxable income. 

Loan Incentives

There are loan incentives for investors who borrow to buy or build a property that is rated 7 stars or higher. Loan incentives for sustainable properties may include interest rate discounts, lower Loan to Value Ratio (LVR), the ability to make extra repayments, and waived loan establishment fees.

Future-Proof Investment

The recent changes to the minimum 7 star NatHERS rating for new builds is part of the Australian Government's overall push toward sustainability. Investors who choose to build a green home will not only be contributing to a more sustainable future for Australia but also avoid having to do retrofits to the home when the ratings are raised again in the future. 

Sustainable Property Investments With Builder Direct

Builder Direct delivers quality investment property builds across the Mackay and Cairns regions - we work with investors to find the perfect balance of affordability, quality, and growth potential for sustainable property investments.

We have a reputation as a leading builder in Mackay and Cairns for over 20 years. Trust us when we say that we know what it takes to design and construct energy-efficient homes that meet or exceed the NatHERS 7-star requirement.