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Cost efficient low-emission housing: implications for household cash-flows in Melbourne

Trivess Moore, John Morrissey and Ralph Horne

International Journal of Sustainable Development, 2014, vol. 17, issue 4, 374-386

Abstract: A number of international jurisdictions have articulated a longer term goal of zero emission housing standards. However, in Australia, housing energy efficiency remains a contested policy area. In part, this is due to a lack of clear cost-benefit information on low emission housing standards, including impacts at the household level. This research investigated the lifetime economics of low emission housing options for typical housing in Melbourne, Australia. The analysis found that for a zero emission house, there was an additional capital cost of $25,637. This translated into extra yearly mortgage repayments of $2,117 at an interest rate of 7.89% across 25 years. However, energy efficiency cost savings of $1,547 a year were calculated, leaving a gap of $570/year in additional mortgage repayments. As a result, policy makers in Australia should focus on reducing upfront costs and developing innovative financial frameworks in order to make low emission housing achievable.

Keywords: housing policy; housing emissions; affordable; renewable energy; lifecycle costing; LCC; zero emission housing; ZEH; sustainable development; cost efficient housing; low emission housing; household cash flows; Australia; energy efficiency; cost savings; sustainability. (search for similar items in EconPapers)
Date: 2014
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Handle: RePEc:ids:ijsusd:v:17:y:2014:i:4:p:374-386