Residz Team 5 min read
In the future, stir-frying a meal over a gas jet, luxuriating under a gas-heated shower, or firing up the gas heater to stay warm may all seem as outdated as the $2 banknote.
In an increasingly eco-conscious world, Australia has seen sweeping changes in its energy landscape. And, slowly but surely, several states and local councils have taken significant steps to reduce their carbon footprint by moving away from fossil fuels, particularly natural gas.
Ending new gas network connections in new homes and businesses will start to take effect as early as later this year in some states and regions - which are making the bold move for both health and environmental reasons.
This shift impacts not only the broader environment but also the real estate market, shaping the decisions of home buyers and sellers. It’s a good discussion point when thinking of buying or selling property.
1. The Ban on Gas Connections
Several Australian regions have started implementing or announcing bans on new gas connections in new homes and certain organisations:
As David Fickling writes in the Washington Post, “Electric and induction cooktops and reverse-cycle air conditioners aren’t just less carbon-intensive ways for locals to heat their food and homes — they’re also cheaper, an advantage that will only grow as the decline of the Bass Strait leaves the country dependent on costlier imported gas.”
He explains that the Bass Strait region that still supplies about 40% of the country’s east-coast gas market is running dry.
Meanwhile, the Queensland Government in August said it would continue to support domestic gas use as part of the state’s energy future. At the same time, Western Australia’s premier Roger Cook said it was “not something that we’re considering at this point in time.” The Climate Council says Western Australia is the country's largest producer of gas, accounting for about 60% of Australia's gas production.
2. The Implications for Home Buyers and Sellers
Buying or selling a home must be decided upon a number of factors. What suits the homebuyer or home seller, what benefits the buyer or seller, and what factors can penalise the outcome for the buyer or seller. For this reason, it’s worth thinking through the impact of any trend away from gas appliances on buyer and seller decision-making.
For Home Buyers:
Checking if your state or council allows new gas connections might be a good idea before you buy any home with that in mind. Generally, though, buying homes with electric appliances already fitted might be worthwhile. Here are some things to consider:
Economic Savings: The Victorian government anticipates that households could save up to $1,000 on their annual energy bills due to this transition. For those with solar installations, this figure might rise to $2,200. According to the Australian Renewable Energy Agency, while the average user of gas hot water had lower annual bills than those with electric water heating in 2020, by 2030 they were projected to be significantly worse off. Looking to buy homes with efficient electric appliances installed can be a good idea for this reason alone.
Environmental Considerations: Buyers who are environmentally conscious can be assured of reduced emissions from their homes, aligning with their personal sustainability goals. EY research shows over 6 in 10 consumers say that, since the pandemic, they are thinking a lot about the future and what is important to them (AU 63% and NZ 65%) with 30% saying they were willing to pay a premium for more sustainable goods and services.
Adapting to New Appliances: With the absence of gas connections, home buyers should prepare to adapt to electric appliances, which could involve a learning curve for some. As Hannah Goldfield wrote in The New Yorker in 2021, cooking with fire “feels ancestral, elemental, effective.” However, her own conversion to an electric induction cooktop was complete, she writes, and she can’t believe how fast water boils using induction power.
Future “fashion”: It may be that one day having gas appliances will be considered old-fashioned, even unappealing, especially in states where the new builds ban them. Being out of fashion may necessitate upgrades to sell the home at a later date.
For Home Sellers:
Competitive Advantage: Homes already equipped with solar panels or electric appliances might gain a competitive advantage in the market, given the projected savings on energy bills. Emphasising the very “now” appeal of modern electric appliances may be a factor that gets a buyer over the line.
Healthier Home: The Climate Council says studies have shown that gas cooktops leak harmful toxins into your home, even when they are switched off. It claims that research shows a child living with gas cooking in the home faces a comparable risk of asthma to a child living with household cigarette smoke. As these facts become more widely known, it will impact a home’s appeal to buyers. Homes could potentially be sold as “healthier” if they are fitted with effective electric appliances.
Potential Retrofitting: For those selling older homes with gas connections, there might be a need to consider retrofitting or highlighting other sustainable features to appeal to eco-conscious buyers. This will be heightened in areas where gas is being phased out in new builds.
3. What Should Home Buyers and Sellers Do?
Given the current trajectory, it's advisable for:
Home Buyers: To actively consider homes with sustainable features, such as solar panels. Moreover, be prepared to embrace electric appliances and weigh the long-term energy savings against potential initial costs.
Home Sellers: To think about potential retrofitting or upgrading to quality electric appliances. Emphasising the sustainable features and long-term cost savings can be a unique selling proposition.
Summary
The shift from natural gas in Australia's housing sector marks a significant step towards a sustainable future. While the transition might pose challenges, including the heightened demand for electricity, the potential long-term benefits for the environment and savings for homeowners make it a change worth embracing.
As the laws are rolled out in some states and councils over the next months and years, both buyers and sellers need to stay informed and make decisions that align with the new energy norms.
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