MARK SALERNO & BILL JOHNSTON
The energy consumed to run our homes presents a significant and growing financial burden to homeowners. In fact, more than 17 percent of the energy consumed in Canada is used to run our homes. Awareness of this fact is increasingly affecting the purchase and renovation decisions of Canadians. CMHC’s annual Renovation and Home Purchase Report surveys homeowners in ten major Canadian cities, and among its aims it seeks to determine what is motivating renovation spending. When asked if the reason to renovate was “to make their home more energy efficient,” 29% of respondents in 2011 responded “yes” versus only 7% in 2010. See Figure 3 from the report.
Arguably, this surge in interest in renovating for energy savings is a result of a growing awareness of the need to address downstream costs in the face of ever increasing utility expenses coupled with a greater concern for the environment. Theavailabilityoffederal,provincial and municipal grants and rebates during the survey period no doubt was a contributor as well.
There’s also a growing appreciation that energy efficiency is important as a selling feature if and when a homeowner decides to sell. Indeed, an energy inefficient home will have trouble competing in a resale marketplace which now includes a growing roster of energy efficient homes and condominium apartments. Whether they are newly constructed as Energy Star Homes, LEED-Certified Condos or they are older homes having undergone deep green renovations induced through the former EcoEnergy Rebates, such homes will garner more favourable financing, an increased pool of potential purchasers and higher market values when compared to homes of similar scale and vintage which are not as energy efficient.
Referring once again to CMHC’s annual Renovation and Home Purchase Report, the main reason reported by house- holds for renovating in 2011 was that they wanted “to update, add value, or to prepare to sell their home” (74 per cent of renovating households). This was also the main reason reported for renovating in 2010. See Figure 3 from the report. Now that consumers are beginning to link energy efficiency with adding value, we will see growth in renovations designed to improve energy efficiency.
Whether you plan to occupy, rent or sell your home, energy efficiency is a wise investment as it allows you to reduce operating costs while increasing its market value. Simply put, it allows you to Future Proof your Real Estate Investment.