Thinking about how to increase property value? You’ve probably heard that interest rates are on the rise and national property prices are on the way back down. So if you want to kill two birds with one stone, refinance to unlock equity and give your home an energy-efficient makeover at the same time. We’ll show you how.
Did you know that energy-efficient homes generally attract premium prices and sell faster than non-eco listings?
That’s according to the US real estate platform Zillow’s 2022 survey, which also found that properties featuring protection against climate-related problems like floods from hurricanes, “can sell for as much as 2.4% more than expected.”
It also pointed out that home amenities like electric vehicle chargers and landscaping that resists drought will give home an edge and in particular, a quicker sale—by nine days, in fact.
Another factor that can help a house sell faster is its ability to reduce monthly energy bills. For instance, properties with listing descriptions featuring double-pane windows not only sold a week faster than similar homes, but for 1% more.
Similarly, homes with solar panels also sold for 1.4% more. Alongside listings that mentioned smart home features, smart thermostats, programmable sprinkler systems, and smart lights, sold up to six days faster.
The report explains that eco-friendly trends address at least two crucial issues that are especially popular amongst younger home buyers; climate change and reduced energy usage in a high-inflation world.
So you can already see how eco-friendly features can help increase property value.
Related articles:
- How To Build An Eco-Friendly And Sustainable Home
- Six Eco Flooring Ideas that are Actually Sustainable
- Renovate or Invest? How Most Aussies Are Using Their Equity
Installations that are popular with potential buyers
Here are the top three eco features popular in house listing searches right now.
1. Solar power
Australia has no shortage of sunshine. And there’s no shortage of demand for houses with solar panels either.
A 2020 Origin Energy survey showed 77% of Australians view houses with solar panels as being more valuable. And 55% of renters said they would consider paying increased rent for solar panels.
2. Water tanks
If you have a sizeable garden or lawn, a sustainable irrigation system can help keep your water bill down. Make use of the rainy season by collecting water in tanks.
When the dry season hits, you’ll be prepared with free, nutrient-dense rainwater to lavish on your garden.
3. Insulation and glazing
Window glazing and insulation can help stop your heating and cooling efforts from leaching out. You’ll also reduce the summer heat and winter chill invading your home.
Financing your eco renovation
Depending on your situation, many lenders now offer green loans to help homeowners install environmentally friendly features – and the good news is that lenders usually offer lower interest rates on green loans in an effort to encourage sustainability.
Another option at your disposal is to unlock the equity in your home to fund your eco reno.
And it’s not a bad time to consider doing so, as property prices increased 23.7% in 2021.
So how does ‘unlocking equity’ work?
Well, let’s say you bought an $800,000 house three years ago that, due to last year’s property price surge, is now worth $1 million.
And let’s also say you took out a $600,000 loan for that house, which you’ve managed to pay down to $500,000 (woohoo!).
By refinancing that $500,000 loan into a $700,000 loan (70% of your property’s new market value), you can unlock $200,000 in equity to help fund a deposit for your renovations.
It’s also worth noting that banks will typically let you borrow up to 80% of a property’s market value.
And don’t forget to check out any government rebates that may be available for eco your installations.
Contact Soho Home Loans today
If all of this seems confusing, don’t fret! We’re more than happy to help you navigate loans, equity, and refinancing for your eco reno.
And if you decide to proceed, the good news is that part of the process can include refinancing your home loan.
Why’s that good news?
Well, just because interest rates are going up, doesn’t mean you can’t scope out a better deal on your mortgage. Competition amongst lenders remains fierce, particularly if you have a decent amount of equity and a strong track record of meeting your mortgage repayments.
So if you’d like to discuss your reno and/or refinancing options, contact Soho Home Loans today.
Need more advice on how to increase property value?
Check out our other articles on how lawns and renovations can boost your property’s value.
And browse our finance category. It’s chock full of hacks and advice from industry professionals. And remember to download the Soho app for quicker browsing and property matching. It’s getting you into your dream home faster!
