New house price hike under ‘seven star’ building standards

New houses in South Australia could cost owners an extra $15,000 – and possibly “much more” depending on location – under “seven star” energy standards set to be introduced next year.

Mar 24, 2023, updated Mar 24, 2023
Houses under construction in Kidman Park. Photo: Tony Lewis/InDaily

Houses under construction in Kidman Park. Photo: Tony Lewis/InDaily

The state government today announced that from October 1, 2024, all newly built homes in South Australia will be required to meet a seven-star energy rating, up from six stars.

New housing accessibility standards – including wider doors, corridors and step-free access – will also apply from this date, in a bid to help older residents and people with a disability find appropriate housing.

The move comes after the Australian Building Codes Board (ABCB) agreed in August 2022 that all new residential dwellings in Australia need to reach a seven-star energy standard.

The ABCB, which is responsible for writing the National Construction Code, allowed states and territories to set their own timetables for when the new energy and accessibility requirements come into force.

Housing Industry Association SA executive director Stephen Knight said the change was “the most significant amendment to the building code since its implementation”.

He said the transition time would give “home builders, designers and manufacturers and suppliers a clear timeline in preparing for and adapting their businesses to these major reforms”.

“Energy rating assessments are different for each home and can vary depending on climate zone, design and orientation and construction materials used,” Knight said.

“Extra insulation, double glazing and thermal breaks are just some of the things that may be required to achieve the seven star rating over the current six star requirement.”

Knight said the additional building cost to meet the standards “will vary depending on what is required”.

“Builders have advised me that up to $15,000 and more in the worst cases could be expected,” he said.

“At Mount Barker for example where there are more extreme weather conditions, depending on design, the extra cost could be much more.”

The state government’s October 2024 implementation date puts South Australia behind Queensland, the ACT and Victoria, which will all adopt the new energy efficiency code this year.

However, the implementation date is ahead of Western Australia, Tasmania and New South Wales.

The head of the state’s peak construction industry lobby, Master Builders SA CEO Will Frogley, said the industry is facing a “well-documented skills and materials shortages”.

“So delaying the implementation until October 2024 is a sensible decision that alleviates pressure,” he said.

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“Master Builders SA will continue working with the State Government to ensure these changes are introduced as smoothly and effectively as possible.

“It is essential housing is affordable and all South Australians have an opportunity to own a home.”

The state and federal governments argue the extra costs required to build homes to the new standards will be offset by year-round savings in energy bills for residents.

Planning Minister Nick Champion said the change would result in “greener, more accessible homes for future generations”.

“These new standards will benefit all South Australians – leading to cheaper energy bills and cost of living relief,” he said.

“We need to give industry time to adapt to the changes, which is why we are providing a transition period to get the balance right and will be working with the industry on a on a range of exemptions.”

Knight said the housing industry may seek exemptions to the code when it can be demonstrated that “it is impractical or cost prohibitive to achieve the measures required”.

“Sloping and narrow blocks, transportable and high set homes and where it can be demonstrated that the higher stringencies do not provide a benefit are just some examples of where homes should be exempt,” he said.

“Additions and renovations of existing homes are also where meeting the requirements could be difficult.

“We look forward to working with the Minister and his team to ensure that the most cost effective and practical measures are considered, it is critical that the impact on housing affordability is front and centre during these discussions.”

Public housing agencies Renewal SA and the South Australian Housing Authority already adhere to the new national construction code, according to Minister Champion’s office.

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