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South African home buyers may be late coming to the “green” party, but they are fast catching up with their counterparts overseas. Independent research recently commissioned by Century Property Developments to gauge awareness among estate agents, home buyers, architects and banks on the issue of green residential developments, suggests home buyers and architects are more enlightened on this issue than estate agents and banks.

Independent research recently commissioned by Century Property Developments to gauge awareness among estate agents, home buyers, architects and banks on the issue of green residential developments, suggests home buyers and architects are more enlightened on this issue than estate agents and banks. The research suggests there is a growing urge among home buyers to move off the grid.

Estate agents and banks regard the initial costs of greening a home as expensive, and therefore a luxury for the wealthy. They also perceive green homes as aesthetically unappealing. Architects, bound by new energy-efficient building regulations, are far more in favour of greening than the other focus groups canvassed in the research, but they too see the costs as prohibitive.

The research by KLA canvassed 200 potential home buyers, 100 estate agents, 15 architects and the major mortgage banks. Among home buyers, energy efficiency and self-sustainability was the third most important attribute, after safety and security and affordability, in choosing a home. The research highlights the gap between what home buyers and estate agents regard as the important issues in home selection.

Estate agents, driven by the imperatives of concluding the sale, are more concerned with the buyer’s ability to afford the mortgage bond and the seller’s transparency in pointing out potential defects, as this could negate a sale in terms of the new Consumer Credit Act. Bankers are more concerned about the risks associated with lending, and appear to place little importance on whether the home is green or not. Estate agents and bankers are also less likely to be informed about what a green home can and should encompass in terms of design, materials and energy-efficient technologies. Perception gap between estate agents and home buyers Some 63 percent of home buyers surveyed versus 43 percent of estate agents rated energy efficiency as the main reason for going green.

Gas is currently 30 percent cheaper than electricity, and the savings will grow as Eskom hikes its tariffs in the next few years. “This highlights a sharp perception gap between estate agents and home buyers - the research shows that home buyers are acutely aware of the rising energy and other costs associated with home ownership,” says Dan Brown, deputy chief executive officer of Century Property Developments. Century Property Developments is the first local residential property developer to actively incorporate eco-friendly measures into its estates.

“There is a strong urge to move off the grid, so to speak, by selecting a home that offers energy-saving facilities such as gas or solar heating, recycled water and energy-efficient lighting.” Brown says this may not be true for all home buyers, but certainly canvassed, those who were looking for homes in the higher income brackets. “Nine out of 10 home buyers cite energy efficiency as an important consideration in selecting a home.” Very little research has been done into the resale value of green homes, but the research showed that there is a strong business case for buying green, due to savings on energy bills over the long term.

Research elsewhere in the world suggests green or energy-efficient homes retain their value better than non-green homes. The 2011 research by Earth Advantage Institute, a non-profit group based in the US, found that newly constructed homes with certifications for sustainability and energy efficiency sold for 8 percent more on average than noncertified homes in the Portland metropolitan area. Existing houses with certifications sold for 30 percent more and they sold faster. Century Property Developments offers liquid petroleum gas (LPG) as a source of heating at several of its estates.

Gas is currently 30 percent cheaper than electricity, and the savings will grow as Eskom hikes its tariffs in the next few years. When other energy-efficiency measures are incorporated – such as double-glazing, water recycling, use of natural materials and organic paints as well as energy-friendly architectural design – the savings can be substantially more, he explains.
According to Brown, the results of this research reveal many interesting things about the South African residential property market, and particularly green developers, of which Century Property Developments is the leader. “It suggests there is a lack of understanding, particularly among estate agents and banks, about the business case for buying green, and what greening actually involves,” he says.

Perhaps the most surprising outcome of the research is the level of awareness among home buyers on green issues. The stark reality of rising energy costs no doubt have a lot to do with this, points out Brown.
“A lot more research will have to be done around this issue in the years to come, as green developments will become the standard in future. “We need to measure resale values of green homes, and to what extent a green home reduces energy bills. We also need to establish a benchmark for best practices in terms of green homes,” he says.
Home buyers in the research cited rates and levies (50 percent of respondents), affordability (48 percent), safety and security (42 percent) and resale value (41 percent) as their top ranked measures of value in purchasing a home.