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How Energy-Efficiency Can Increase Your Home's Value +$100k

Never mind an extension, here's how improving the energy efficiency of your property can increase its financial value.

Improving a property’s energy efficiency is no longer just an environmental consideration, but a strategic financial decision.

This article from AFR came to our attention. It does have a paywall, so we can sum it up for you:

In 2021, a Sydney couple were looking for an apartment with a budget of $500-600k, until they came across a new development of energy-efficient townhouses. Energy-efficient solutions included:

  • insulated windows
  • no gas connection (electric only)
  • induction stovetop
  • solar panels

The prices were $790k, $200k more than their initial budget, but they went for it.

From increased market appeal to reduced operating costs, energy-efficient upgrades are proving to be a key driver of long-term property value. This article outlines how targeted improvements can enhance asset worth, attract buyers or tenants, and deliver measurable returns.

“Domain’s Sustainability in Property Report 2025 shows that energy-efficient features are now considered mainstream rather than niche, and a top priority for property hunters. It also reveals that buyers are willing to pay more for homes with these features compared to homes without.”

(source)

The Growth of Energy-Efficiency Demands

 

Demand for energy-efficient homes has boomed. As the couple in AFR’s interview mentioned:

“The fact it was potentially going to save us on energy and bills was definitely attractive… Especially at a time when the energy bills started to go really high because of the resource shortage from the Ukrainian-Russia war. That was something we were mindful of.”

It also highlights that, despite budgets, educated buyers are willing to spend more for a home with energy-efficient solutions already installed.

“As of 2025, energy-efficient [EE] houses are selling for 14.5 per cent more than their non-EE counterparts – a difference of $118,000 [across the combined capitals].” (source)

Melbourne Median Prices for Energy Efficient Homes

 

Domain has created this helpful table with data from 2025 showing median house prices. And, here in Melbourne, we can expect a house with energy-efficient solutions to sell for 23.8% more than houses without. They’ve estimated that at $197,000.

To put this into perspective:

REA estimates a bedroom extension to add an additional $ 50- 80k (source). And the cost of adding that bedroom, via an extension, can cost from $20k upwards, to as much as $120-150k. So, there’s a good chance adding a bedroom via an extension will cost you more than the value it adds.

Extension or Energy Efficiency Upgrades?

Choosing how to financially invest in your property, is a serious decision that requires careful consideration. It can be easy to listen to guests as they enter your home:

“Oh, you should add an extension. Stick on another bedroom and you’ll increase the value of your property $100k.”

As above, and highlighted by Domain, that isn’t necessarily the case, and often an extension can cost considerably more than the value-added.

So, what about energy-efficiency solutions?

The Cost of Energy-Efficiency Upgrades Vs the Added Value to a Property

In Victoria, much like other states across the country, there are State and Federal Government incentives and rebates available that exist specifically for energy-efficient upgrades.

Examples in Victoria:

Victorian Energy Upgrades (VEU) Program
The VEU program offers discounts on various energy-efficient products and services

Note: From early 2026, insulation discounts will also be available under the VEU program.

Solar Homes Program
Administered by Solar Victoria, this program provides:

  • Solar Panel (PV) Rebates: Financial incentives to install rooftop solar panels.
  • Solar Battery Loans: Interest-free loans to support the installation of solar battery systems.
  • Hot Water Rebates: Assistance for upgrading to solar or heat pump hot water systems.

Additional Support
The Savings Finder tool on Service Victoria’s website can help identify other applicable rebates and concessions.

For renters, landlords, and body corporates, specific guidelines and support are available to facilitate energy efficiency upgrades.

To access these rebates and ensure compliance with program requirements, it’s essential to engage with Accredited Providers, such as Energy Makeovers, one of Victoria’s largest Accredited Providers, through the VEU.

For more detailed information and to explore available options, visit the Victorian Energy Upgrades and Solar Victoria websites.

Summary: What this means is that you can upgrade your property with financial subsidies, to not only reduce the outgoing investment cost, but also increase the profit should you choose to sell.

For example, let’s create a hypothetical case for a couple in Melbourne who are upgrading their energy efficiency to increase the value of the property. They chose the following energy-efficiency upgrades:

  • Installing insulation with a subsidy: $3k
  • Showerheads and weather sealing: free
  • Upgrading to solar panels (rebates, battery and STCs included): $6k
  • An electric hot water heat pump harnessing the solar energy (with subsidy): $2k

Total costs: $11k.

Potential value added to the property that can now boast energy-efficient solutions installed: $100k

Interested in Energy Efficiency & Don’t know Where to Start?

 

Our energy-efficiency team can help. We can provide an obligation-free energy assessment of your property, advising where you can upgrade/install/invest and the cheapest way to do it. Where possible, we include State and Federal rebates and subsidies to ensure you have the lowest pay-back period and the highest ROI on your investment.

Contact our team, or click here to learn more.

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