Energy efficient homes are gaining traction and the concept has a dominant influence on the minds of prospective home buyers.
The need and demand for energy efficient homes are increasing each day as good health, well-being and sustainable efforts occupy the mind of prospective home buyers. Covid-19, which hit everyone across the globe in early 2020, has forced people to be more considerate towards the environment and that has significantly changed the way people look at real estate, amongst other things.
Where once aspects like ‘spending power’ and ‘luxury’ influenced the choices of a home buyer, now factors like access to open and green spaces, healthcare and proximity to the workplace play an important role while buying a new home. Energy efficient homes are gaining traction and the concept has a dominant influence on the minds of prospective home buyers.
According to Knight Frank’s Global Buyer’s survey, nearly a third of buyers (28 percent) say environment regulations affecting the value of their home would influence their decision to buy.
What does the survey report say:
The report found that 84 percent of home buyers said the energy efficiency of a future home is important (42 percent saying ‘very important’, while another 42 percent calling it ‘important’) to them. Around 27 percent would prefer a greener home and would be willing to pay a premium for it, while 22 percent consider the green finance element, and the prospect of cheaper mortgages, a motivating factor.
Less than one in five respondents said the energy efficiency of a home would not influence their purchase decision. Of the ‘other’ respondents, ongoing costs in the form of lower energy bills were cited as a motivating factor.
A worthy investment:
Although many builders are reluctant to invest in green buildings and efficient homes assuming inflated costs, they fail to understand the long term investment they will miss out on. Construction sector in India is responsible for 22 percent of global greenhouse gas emission. Buildings contribute to one-third of global greenhouse gas emissions and consume 40% of the world’s energy. However, through sustainable designs, constructions and operations green buildings and energy efficient homes can reduce the emission of toxins. Going green right from the grass root level can help control and reduce the pollution. The younger generation, which represents a sizable section of the potential buyer group, will want to dive deep into the details of a real estate project and will definitely lean towards eco-friendly projects. Housing complexes which have built-in solar panels, proper ventilation, appropriate wall-to-window ratio, and light color on the walls will attract the younger generation as these subliminal changes will eventually help saving maintenance and electricity costs in the long run.
Benefits of energy efficient homes:
Everyone loves saving an extra amount every month, but not at the cost of cramping or making changes to their lifestyle. A smart investment in an energy efficient home or a green building project will give you a minimum of 30 percent reduction in your monthly electricity bills. Most builders and developers prefer to choose construction materials available locally, which speeds up the work. Investing in a home is one of the biggest emotional purchases for anyone and buyers these days, mostly millennials, will not be happy making a purchase at the cost of harming the environment.
The government is putting in efforts to promote and enhance energy efficiency in the building sector. In one of its recent initiatives called ‘Azadi Ka Amrut Mahotsav’. Some of the initiatives that will help boost energy efficient homes in the real estate sector are:
# The government introduced a web-based platform which can be used to create a pool of ready-to-use resources of replicable designs to construct energy-efficient homes in India, it’s called – ‘The Handbook of Replicable Designs for Energy Efficient Residential Buildings.
# An online directory of building materials will be created that would envisage the process of establishing standards for energy efficient building materials.
# To encourage exceptionally efficient building designs that comply with BEE’s Energy Conservation Building Codes, the government has announcement of NEERMAN Awards, (National Energy Efficiency Roadmap for Movement towards Affordable & Natural Habitat).
# Training of over 15,000 Architects, Engineers and Government officials on Energy Conservation Building Code.
The road ahead:
The future is never set. Yet, like any management executive worth their salt will tell you, with proper planning and study of metrics, you can influence the future to work in your favour. Here, the writing is literally on the wall, in bold green colour. Energy efficient homes are the future of realty, especially from the perspective of the largest section of the buyer demographic – the middle class. The future homeowner will prefer a green tag on their dream home and the real estate developers and infrastructure needs to be perceptive to this fact. Building green homes with sustainable resources might temporarily escalate operational costs, but in the long run, any business that responds to its consumer’s demands and expectations makes sure the long term gains far outweigh the short term compromises.
(By Sujatha Ganapathy, Vice President, Well Standard Business, Knight Frank)