The wandering energy stars: The challenges of valuing energy efficiency in Australian housing

Warren‐Myers, Georgia; Kain, Catherine; Davidson, Kathryn

doi:10.1016/j.erss.2020.101505

Cited by 15 publications

(7 citation statements)

References 67 publications

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“…The “need for further education” barrier was subsequently found in research by Warren-Myers (2013, 2016) in examining commercial valuers in Australia; Michl et al. (2016) in a study of UK and European valuers in 2012; in Thanh Le and Warren-Myers (2019) comprising Melbourne institutional grade commercial valuers; and most recently, in Warren-Myers et al. 's (2020) study of Australian residential valuers.…”

Section: Valuation Practice Market Evolution and Sustainability Consi...mentioning

confidence: 99%

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Valuing sustainability part 1: a review of sustainability consideration in valuation practice

Warren‐Myers

2022

JPIF

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PurposeThe research investigates valuers' understanding of the value of sustainability in property and its consideration in valuation practice. The paper explores the extant research that has examined valuers' perceptions of the relationships between sustainability and market values, sustainability measurement, value relationships and the standards and guidelines released industry bodies.Design/methodology/approachThis paper, part 1 of 2, reports the current state of play of valuation research in the consideration of sustainability in valuation practice and the role of industry bodies in the guidance regarding sustainability consideration in valuation. The second paper provides the next rendition of a longitudinal study examining valuation practice in Australia.FindingsThe paper provides an overview of the evolution of the consideration of sustainability in property over the past two decades. Providing insights of how the property sector, its markets and valuation professionals have responded to answering the questions of: what is the value of sustainability? Whilst earlier publications both industry and academic publications alike focussed on the normative aspects of how sustainability should affect value, more recent research starts to ascertain the implications of sustainability on property values. Despite industry bodies providing information, education, guidelines and standards, it would seem that valuers in their practice are still grappling with the challenges of understanding the rapidly evolving area of sustainability, environmental, social and governance and climate risks in valuations.Research limitations/implicationsThe paper does not present as an authority on all research that has been conducted to date, it provides an overview of the evolving nature of both academic research and industry consideration of sustainability, particularly in a valuation context. This provides the background for Part 2.Practical implicationsThe broader agenda of net zero, climate change, mitigation and carbon requirements, whether driven by market forces or government legislation, are generating substantial changes in property markets, as investors reconsider their positions and model the implications of carbon emissions on their bottom lines. Government policies appear to have a considerable influence over market behaviours, which filters through to stakeholder decision-making. However, despite government policies, clear market signalling and industry body guidance on valuing sustainability, the content and depth of sustainability consideration in valuation are still limited.Originality/valueThe paper provides an overview of the last decade of research into the value of sustainability and the evolving nature of information and guidance for valuers to identify, evaluate and consider sustainability in valuation.

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Section: Valuation Practice Market Evolution and Sustainability Consi...mentioning

confidence: 99%

“…(2008), Warren-Myers and Reed (2010), Warren-Myers (2013, 2016), Michl et al. (2016), Thanh Le and Warren-Myers (2019), Warren-Myers et al. (2020).…”

Section: Valuation Practice Market Evolution and Sustainability Consi...mentioning

confidence: 99%

Valuing sustainability part 1: a review of sustainability consideration in valuation practice

Warren‐Myers

2022

JPIF

Self Cite

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“…Subsequent work by Thanh Le and Warren-Myers (2019) undertook a focused study of commercial institutional grade property valuers and Warren-Myers et al . (2020a, b) examined residential valuers. Warren-Myers (2009) hypothesised that as the number of buildings in the market increased, so to would the knowledge development of valuers in their assessment and consideration of sustainability in valuations.…”

Section: The Australian Context Of Sustainability Energy Efficiency A...mentioning

confidence: 99%

Valuing sustainability Part 2: Australian valuers' perception of sustainability in valuation practice

Warren‐Myers

2022

JPIF

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PurposeThe research investigates valuers' understanding of the value of sustainability in property and its' consideration in valuation practice in Australia. This paper explores valuers' perceptions of the relationships between sustainability and market values, sustainability and valuation variables, and the value influence of industry sustainability certification schemes. Further, this paper tracks prevalence of certified buildings in Australian commercial markets and the evolution of valuers' knowledge of sustainability certifications used in Australia.Design/methodology/approachThis paper reports on the next rendition of a longitudinal study examining valuers’ practice in Australia. This research explores the evolution of Australian valuers' perception and knowledge of sustainability in valuation practice. The survey data has been periodically collected from practising valuers from 2007 to 2021. The survey questions investigate valuers' knowledge development, understanding, reporting and consideration of the relationship between sustainability and market value.FindingsThe results have identified the evolution of the influence of normative research on valuers' perceptions of the relationship between sustainability and value; with a clearer understanding emerging over time of where the value relationships are identified in valuation variables. Greater alignment between empirical Australian studies and valuers' perceptions of the influence of sustainability ratings on value, demonstrate the value connection for higher rated buildings under NABERS (energy rating) and Green Star. Whilst only 41% of the study's participants are including sustainability in their valuation reports, they include a higher level of commentary on building descriptions and initiatives, building ratings, and reporting of owner and tenant objectives, than in previous studies. Knowledge development relating to sustainability certification tool, NABERS was identified. This is likely linked to the introduction of mandatory disclosure legislation. This has also led to increased awareness and valuers' knowledge of the differences between the two key rating tools used in Australia.Research limitations/implicationsThe research has several limitations: firstly, recruitment of valuers and the number of valuers' responses has varied over time; secondly, due to collection methods respondents have a greater likelihood of having an interest in and knowledge of sustainability creating potential for positive bias; thirdly, respondents may have responded to the survey in different years, but due to anonymity there has been no ability to track this. The results provide insights into the Australian valuation profession but may not be fully representative of the profession overall in Australia.Practical implicationsThe broader agenda of net zero, climate change, mitigation and carbon requirements, whether driven by market forces or government legislation, are generating changes in property markets as investors' reconsider their positions and model the implications of carbon emissions on their bottom lines. Introductions of policy and legislation over time in the Australian context have led to changes in valuation practice and increasing consideration of energy efficiency and ratings in the valuation of assets. However, further guidance and research still is required in Australia to assist in the knowledge development of valuers, and their ability to consider the emerging effects of sustainability, net zero and other market driven objectives including legislation, and how these may affect or influence their evaluation of market evidence and thus property values.Originality/valueThe research has tracked valuers' understanding, knowledge, and consideration of sustainability and energy efficiency in valuation practice since 2007. In that time the research has found that, as the market has evolved and more rated buildings are built (or retrofitted), so too has valuers' knowledge and consideration in valuation practices evolved. Valuers are more engaged with industry rating tools such as NABERS. This suggests that the Australian mandatory disclosure policies have contributed to changes in the market, which are then interpreted by valuers and reflected in their perceptions and consideration of energy ratings in valuation practice.

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“…[26] Reflectance Some types of materials dispose of high reflectance for solar radiation, sound, and noise level such as glass. [43,44] Transmittance The fraction of solar radiation diffused through a specific type of materials related to its opacity or transparence (called also solar heat gain coefficient) [45] Conductivity The thermal conductivity of the material (W/mK) [44] Specific heat Specific heat capacity of the material (J/kgK) Glazing properties Openings (windows, doors) with double/triple glazing properties decrease the amount of diffused noise and air from outdoor to indoor or within indoors different units. [46]…”

Section: Absorptionmentioning

confidence: 99%

3D Variables Requirements for Property Valuation Modeling Based on the Integration of BIM and CIM

et al. 2021

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The growing rate of urbanization and vertical urban development has aroused the significance of geo-related variables for property units disposed vertically within the same building. Among these, 3D indoor physical and outdoor environmental variables are impacting the property value for each building unit. However, in the literature, the identified 3D variables, by using hedonic pricing models (HPM) for property valuation, are mainly restricted to 3D visualization. Their use in 3D simulation for an accurate evaluation of the property value is still limited. Furthermore, their value is often defined for a specific valuation purpose (e.g., taxation). This paper aims to investigate 3D variables with a significant impact on property value, to combine them with 3D technical requirements and to be integrated in a future valuation model. Moreover, their 3D spatial and non-spatial elements are analyzed to identify which variables can be provided from 3D city models and building scale elements. To accomplish this, the potential of 3D building information modeling (BIM) and city information modeling (CIM) in property valuation is examined. From indoors; BIM/IFC (Industry Foundation Classes) models are the main data sources for structural and living quality variables. While from outdoors, environmental variables and the surrounding building’s information are provided from 3D city models (CityGML).

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The wandering energy stars: The challenges of valuing energy efficiency in Australian housing

Cited by 15 publications

References 67 publications

Valuing sustainability part 1: a review of sustainability consideration in valuation practice

Valuing sustainability part 1: a review of sustainability consideration in valuation practice

Valuing sustainability Part 2: Australian valuers' perception of sustainability in valuation practice

3D Variables Requirements for Property Valuation Modeling Based on the Integration of BIM and CIM

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