03 Oct 2023
The New South Wales State Environmental Planning Policy (Sustainable Buildings) 2022 (SEPP) came into effect on 1 October. It introduced updated sustainability standards to improve energy efficiency and accessibility for most new residential buildings across NSW, and apartment buildings up to five storeys. We asked Shay Singh, our Senior Manager Policy and Government Relations, what the changes mean for occupiers and industry.
On 1 October, NSW was the first state to implement agreed updates in the National Construction Code 2022 (NCC) via introduction of the Sustainable Buildings SEPP and updates to the Building Sustainability Index (BASIX),which aim to deliver equitable and effective water use and greenhouse gas reductions across NSW.
An essential certification for all new residential developments and renovations over $50,000, BASIX measures water efficiency, thermal performance, and energy efficiency. Under the new changes, for the first time, BASIX will also measure embodied carbon, helping the state reach its climate goals sooner, while showing other jurisdictions around the country what’s possible when measuring the impact of materials used in construction.
Other changes to BASIX:
The thermal performance standards within BASIX are designed to keep homes warm in winter and cool in summer, meaning we can be comfortable all year around without having to rely on appliances like heaters and air conditioning.
As part of the 1 October changes, the thermal performance standard is increasing from an average of 5.5–6 stars to 7 stars Nationwide House Energy Rating Scheme (NatHERS). All homes built in NSW from now on must comply with this new standard, keeping residents more comfortable through the seasons and as the climate changes.
The energy efficiency standard is also changing, increasing to deliver a 7-11% reduction in greenhouse gas emissions to align with the National Construction Code (NCC) 2022. Combined, these updated standards will create homes that are:
What savings will NSW residents make under the changes?
The improved standards are underpinned by a comprehensive cost benefit analysis and sensitivity testing undertaken by the NSW Government, which factored in rising interest rates and energy prices.
While meeting the higher standards may incur slightly higher construction costs, these costs will be spread over the lifetime of the mortgage, along with the ongoing benefits of reduced energy bills.
Analysis shows that an average home meeting the higher BASIX standard will save $1,070 per year in energy bills and have $678 extra to spend each year (bill savings less the mortgage repayments on 5.94% p.a. interest rate).
How do these changes fit in with the NCC?
NCC 2022 was agreed and adopted by all jurisdictions in 2022. However, each state and territory has set its own implementation timeline for introduction of the new standards to reflect local industry and supply chain capacity.
While the Sustainable Building SEPP has commenced, the NSW government has allowed a nine-month transition period to reduce potential financial impacts of complying with the increased standards for home buyers and builders. Homebuyers with a signed building contract for a house or duplex before 1 October 2023 can apply to use the existing BASIX standard and generate BASIX certificates up until 30 June 2024.
Why should homeowners adopt higher standards now?
GBCA’s own data shows that homeowners that build thermally comfortable, energy efficient homes save significantly over time despite initial costs, with savings on energy costs outpacing the initial upfront investment.
When homes are designed to reduce energy bills and boost comfort by incorporating features like double glazed windows, improved insulation, heat recovery ventilation systems and air conditioning, occupiers will save from the moment they move in, without the worry of retrofitting these measures later which can be costly and inconvenient.
Adopting the new standards today means householders can enjoy the benefits of a healthy, efficient sustainable home that will stand the test of time, sooner rather than later.