Research commissioned by Century Property Developments shows estate agents are primarily concerned with affordability of housing, tighter credit rules and the seller’s transparency in pointing out potential defects in the home
Transparency from the seller has emerged as a major issue for estate agents, as failure by the seller to point out potential defects could negate the sale in terms of the new Consumer Credit Act.
Century Property Developments commissioned the research to gauge awareness among estate agents, home buyers, architects and banks on awareness of green residential developments. The findings suggest home buyers and architects are more enlightened on issues surrounding green developments than estate agents and banks. The research, by KLA, canvassed 100 estate agents, as well as 200 potential home buyers, 15 architects and the major mortgage banks.
“There is understanding among estate agents of the importance of investing in green residential properties, but they are not positioning this as important when selling to clients. The feedback we got from estate agents is that there is not much demand from home buyers for green properties,” commented Dan Brown, Deputy CEO of Century Property Developments on the research findings.
Some 37% of estate agents rated green initiatives as very important. There was a stronger response from estate agents on whether green properties would offer a positive return on investment. Some 55% of agents believed this was “very likely”, versus 52% of home buyers.
“This is a subject which requires further research in SA. Green developments are very new to SA, and it will need a few years before we can measure the resale values of green properties, but overseas research clearly shows that green properties have a higher resale value than non-green properties, and they sell faster.”
Brown adds that the business case for buying green is poorly understood by many estate agents and banks. “There is a perception that the pay-back on investment on a green home is 10 or 20 years, when in fact it is becoming much shorter, particularly in light of rapidly escalating electricity prices.”
Using gas rather than electricity to heat a home is already 30% cheaper, and the difference will grow in the coming years as electricity prices rise. By incorporating other green elements into a home – such as recycled water, energy-efficient design and use of natural materials – the business case for buying green is even stronger, adds Corbett.
One interesting finding of the research is that architects and home buyers are more eco-aware than estate agents and banks. Architects surveyed said more than nine out of 10 of their clients wanted green homes, not because they have to, but because they want to.
Some 63% of home buyers cited energy efficiency as the main reason for going green, while this reason rated only 43% among estate agents. This suggests a perception gap between estate agents and home buyers over the importance of greening.
There is a strong urge among home buyers to move off the grid.
For home buyers, energy efficiency and self-sustainability was the third most important attribute, after safety and security and affordability, in choosing a home.
Some 63% of home buyers surveyed – versus 43% of estate agents – rated energy efficiency as the main reason for going green.
There is a gap between what home buyers and estate agents regard as the important issues in home selection: estate agents 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. Buyers cite safety and security, as well as affordability, as their chief concerns, but appear to be more eco-aware than estate agents.
Bankers attach little importance to greening. They are more concerned about the risks associated with lending.
International research suggests green homes have a higher resale value, and sell faster.
Estate agents and banks question the return on investment of greening a home, whereas home buyers are more attuned to the cost benefits.
The perception among estate agents is that green homes lack aesthetic appeal, while architects argue that with sufficient budget, homes can be green and aesthetically pleasing.