We have the technology, so why don't we build more energy-efficient homes?

Saturday, 10 May 2025

New Zealand does not build as many energy efficient homes homes as might be expected given the benefits to health, happiness, lower power bills, and a reduced national carbon footprint.

ANALYSIS: The Green Building Council Housing Summit started with a dismal statistic from economist Brad Olsen: Only around 13% of new homes are built to Homestar 6 green building standards.

That was a slightly aged statistic, but the council says not that much has changed since 2020 when it originated.

It’s hard to find people who think building energy inefficient homes is sensible, as it locks households into higher power bills and the country into a higher carbon future.

Yet it’s not happening at the scale that would be expected given convincing research suggests the power savings far outweigh the added upfront cost of building better.

Over a 30-year period, designed to coincide with the length of a typical new mortgage, owners of Homestar 6-rated homes could save $62,000 in electricity and mortgage interest, Olsen found in research commissioned by the Green Building Council, which runs the Homestar certification scheme.

Building and Construction Minister Chris Penk told the conference that bringing down the cost of building and cutting planning red tape would leave people more money to spend on building more heat efficiency into their homes.

Keremia Jane Tairua, 56, says she has been living in a damp and mouldy state house for three years and it has made her sick.

But as an answer to the riddle of why New Zealand continues to build energy-inefficient homes, the ‘red tape’ argument didn’t get much credence at the summit at the Grand Millennium Hotel in Auckland on Wednesday.

“This fantasy that people will build above the approved standard doesn’t play out,” said Francesca Muskovic, national policy director at the Property Council Australia.

“People are going to use the crappiest product available,” Muskovic said, as long as it meets the minimum building standard required under law.

The global experience is that minimum building code standards matter, she said.

And New Zealand’s is pretty weak compared to many countries we like to consider international peers.

“Our Building Code is out of step with most of the OECD,” said Andrew Eagles, chief executive of the Green Building Council.

Andrew Eagles, chief executive of the Green Building Council, says New Zealand’s minimum building standards are too low.

And that does not look set to change, as the current Government’s building policies have come in for criticism.

On the positive side of the ledger, The Government signed up to the Declaration of Chaillot in March last year; committing to transition to energy efficiency in building, and at the COP28 climate change summit in late 2023, it made other energy efficiency pledges.

However, Eagles said it had scrapped the Building for Climate Change programme to bring in measurement of operational and embodied carbon in the building code.

It had also proposed scrapping the use of energy efficiency ratings when government builds or leases larger buildings.

One idea from the Building and Construction Minister Chris Penk was relatively warmly greeted at the Green Building Council Housing Summit in Auckland. It was making Kainga Ora energy efficient homes plans public so others could use them to build healthier homes.

“This is a shame,” Eagles said.

“Government procurement really helps with sector transformation. More builders and designers experience building in a healthy low carbon way. This means they are more likely to offer that for other customers and kiwi families.”

There was a global skills shortage in energy efficient building, and raising minimum building standards forced the construction industry to upskill, the conference heard.

Research scientist Vicki White is heading the huge Household Energy End-use Project 2 (HEEP2), studying over 700 households to find out just how good, bad, or indifferent New Zealand homes are when it comes to exposing their occupants to cold, mould and damp in winter, and extremes of heat in summer.

Vicki White, research scientist from BRANZ, says preliminary results from the Household Energy End-use Project 2 are ‘not reassuring’.

The preliminary findings were “not reassuring” she told summit delegates.

“Around half of households said their homes were colder than they would like, and for 14% that was always, or often, and a shocking statistic… was that around one in five said their houses were cold enough they could see their breath, or shivered,” she told the summit.

Around half experienced mould, and a high proportion experienced condensation.

On winter evenings, about 25% of living areas were below the 18 degrees celsius recommended level, though the average was an acceptable 20 degrees.

Particularly concerning was that many bedrooms were not heated, and the average temperature was below a healthy 18 degrees, and a quarter, including many rooms occupied by children, went below 14% at some point during the night.

Winter condensation on windows is a common experience in many New Zealand homes.

Perhaps a partial answer to the riddle of why so few comfortable, energy efficient homes were built was a New Zealand cultural acceptance that cold homes are not really a problem.

Despite the hard evidence from HEEP2, “92% strongly agreed their home was a healthy place to live, despite experiencing these things,” White said.

Part of the study involved a close focus on 20 new homes built to a high thermal standard, and 20 new homes not built to a high thermal standard.

Gareth Gretton, lead advisor for research, evaluation and insights at EECA, the Energy Efficiency and Conservation Authority, makes his point at the Green Building Council Housing Summit in Auckland in May.

There was almost no reporting of cold and condensation, and no reporting of damp and mould, by people living in the high performance homes.

However, HEEP2 is not entirely depressing. Compared to 20 years ago, there appeared to have been an average improvement in temperatures and other conditions in homes, some of it related to the spread of heat pumps.

Some of the observed improvement may be related to what is considered a New Zealand success story: the Warmer Kiwi Homes programme.

Gareth Gretton, lead advisor for research, evaluation and insights at EECA, the Energy Efficiency and Conservation Authority, said EECA programmes had insulated over 400,000 homes over the last 15 years.

The Housing Summit heard that every $1 spent on improving housing led to a $5 saving on health costs.

“This is approximately one quarter of the pre-2008 building stock,” he said.

And insulation and heating requirements forced on landlords in 2019 by a Labour-led government had also improved rental properties, he said - though White said rentals were under-represented in HEEP2.

However, New Zealand still had decades of retrofitting ahead of it, he said.

“It will happen because of drive for better living standards, but it will be a longer process.”

Erana Dobson, asthmatic and 'human unhealthy home detector'.

Luke Menzel, chief executive of Australia’s Energy Efficiency Council, said continuing to build homes that would have to be retrofitted for energy efficiency later made no financial sense.

“It’s insane. We all know the direction of travel,” he said.

Menzel said when governments fast-tracked developments, the quid pro quo should be that developers built energy-efficient homes.

Kieran McAnulty, Labour spokesperson for housing, says, ‘There's a common perception that building green homes is prohibitively expensive. While sustainable materials and technologies often have higher upfront costs, studies suggest that the long-term savings in energy bills and health benefits often outweigh these initial investments.’

The impact on individual lives from better building was provided at the summit by Aucklander Erana Dobson, an asthmatic who until recently lived in a poorly-insulated, damp flat on Auckland’s Karangahape Road, before moving into the modern Moroki building complex.

“I was having a dehumifier running, emptying it twice a day,” she said.

The apartment had been “renovated to paint over black mould,” she said.

“I’m asthmatic and naturally prone to allergies. I’m an unhealthy home detector,” she said. “If I’m fine in a home, it’s a healthy home.”

At the K Road apartment, her trips to the doctor were frequent, as was her time off work, she said. Her new home, in which she is a tenant, was warm in winter, and had a heat pump running off solar power to cool it in summer without costing her an arm and a leg.

The summit heard about several developers which built energy efficient homes to sell to others, like Ockham Residential. But it also heard about developers incentivised to build to high standards because they intended to own the places they built for the long term, like the iwi behind the Moroki complex.

Brad Olsen said public awareness of the economics of green building was poor.

Dobson had no patience for politicians not working to deliver healthy homes to everybody.

“I don’t think it should be a privilege to live in a healthy home. I don’t think that’s leadership, if that’s their stance,” she said.

Labour’s housing spokesman Kieran McAnulty later told The Post New Zealand had a long way to go to get up to scratch and progress with building green homes, despite updates to the building code in 2022.

The code had been criticised for lagging international standards, including for insulation, he said.

Helen O'Sulliuvan, CEO of Real Estate company Valocity Global.

“This results in homes that are colder, damper, and less energy-efficient than they could be,” he said.

But, he said: “Encouraging adoption of new sustainable technologies and practices is resisted by the current Government which is backwards and disappointing.”

He also touched on another issue that is seen as providing clues to solving the green building riddle.

“Many buyers and builders are still unaware of the financial and health benefits, such as reduced utility costs,” McAnulty said. “This lack of demand means builders have little incentive to adopt sustainable practices.”

Olsen touched on this lack of public awareness. He admitted he had not run the numbers on his own house in Wellington, despite “freezing his butt off” in Wellington winters.

But there were things to be hopeful about. More green finance could help get more green homes built.

BNZ, Kiwibank, ASB and Westpac were all offering lower cost finance to developers who build to Homestar 6 or better standards, said Eagles.

This provided a countervailing pressure against the temptation for developers to build cheap, leaving big power bills for the people they flicked off their homes to.

Eagles called on banks to do more, including following ANZ’s example of offering discounted home loan interest rates to borrowers with homes rated Homestar 6 or better.

Helen O’Sullivan, chief executive of real estate data company Valocity Global, said Valocity was gathering data and working with banks and insurers to understand how building quality affected value.

As a result, the buyer of the future could expect to have much more data on a home’s thermal efficiency than the homebuyers of today have, she predicted.