Disclosure and Market Readiness

Why Existing Homes Are the Next Big Building Performance Challenge

Australia’s next major building performance challenge is not only about new homes. It is about the homes that already exist.

Millions of Australians live in established homes that were designed, built or renovated before today’s energy efficiency expectations. These homes may be difficult to heat, difficult to cool, expensive to run or poorly prepared for future disclosure and retrofit programs.

That is why existing home energy ratings are becoming important. They create a practical way to understand how a home performs now, what may be holding it back and which upgrades may be worth considering first.

Why existing homes matter now

For many years, residential energy performance has been easier to regulate in new homes than in existing homes. New projects have design documents, approval pathways, modelling processes and construction requirements. Existing homes are more complex.

An established home may have been built decades ago, extended several times, upgraded without records or changed by different owners with different priorities. It may perform very differently from what its age, appearance or real estate photos suggest.

As Australia expands existing home rating pathways, the performance of these homes becomes easier to understand and easier to discuss in practical terms.

Why new-home standards are not enough

Improving new homes is essential, but it does not solve the existing homes challenge by itself. Most homes that people will live in over the coming decades have already been built.

A new seven-star home may perform well, but it does not improve the comfort of an older, draughty, poorly insulated home already occupied by a household today. It also does not reduce the energy demand of millions of existing dwellings that continue to use heating, cooling, hot water and appliances every day.

That is why the national conversation is shifting toward existing-home ratings, retrofit planning and market disclosure.

The scale of the challenge

Residential buildings account for a significant share of Australia’s electricity use and emissions. The update to the Trajectory for Low Energy Buildings notes that residential buildings are responsible for around 24% of Australia’s electricity use and more than 10% of total carbon emissions.

That means housing performance is not a minor technical issue. It is connected to household bills, electricity demand, emissions reduction, comfort, health, property value and national retrofit policy.

Existing homes sit at the centre of that challenge because they represent the housing stock people already occupy.

The comfort problem

Many existing homes are uncomfortable because the building fabric does not manage heat well. They may overheat in summer, lose warmth in winter or feel uneven from room to room.

Common causes include:

• poor or missing insulation
• unshaded glazing
• single glazing or weak window performance
• draughts and air leakage
• hot roof spaces
• poor ventilation
• inefficient heating and cooling systems
• renovation gaps between old and new areas

For summer comfort context, see Why Older Australian Homes Overheat in Summer.

The energy bill problem

Poor building performance often shows up as higher energy use. If a home gains heat too quickly, loses heat too easily or leaks conditioned air, heating and cooling systems need to work harder.

Homeowners may respond by installing larger systems, using portable heaters, running air conditioning for longer or adding solar without reducing the demand that sits underneath the bill.

A better approach is to understand whether the bill problem is caused by systems, building fabric, behaviour, climate, appliances or a combination of these factors.

The emissions problem

Existing homes are also part of Australia’s emissions challenge. Heating, cooling, hot water, cooking, lighting and appliances all contribute to household energy use, and inefficient homes can increase demand unnecessarily.

As the electricity grid changes and households electrify, building fabric still matters. A poorly performing home can require more energy to stay comfortable even if the appliances are efficient.

This is why emissions reduction is not only about switching systems. It is also about reducing avoidable demand through better building performance.

The documentation problem

Existing homes often have incomplete records. Original plans may be missing. Renovation documentation may be partial. Insulation may be hidden. Window performance may be unknown. Previous upgrades may not have been recorded.

This makes existing home assessment more complex than new-home modelling. The assessor may need to work with available plans, photos, site data, visible evidence, system information and pathway-specific assumptions.

For this reason, existing home rating is also a data challenge, not only a building challenge.

The renovation problem

Renovation is one of the best opportunities to improve home performance, but energy performance is often considered too late or too narrowly.

A renovation may replace a kitchen, open a living area or add a new room without addressing insulation, glazing, shading, ventilation or systems. The home may look improved but still overheat, leak air or use more energy than necessary.

For renovation pathway context, see Existing Home Energy Rating vs Renovation Energy Assessment.

The market information problem

Property markets usually make visible features easy to compare. Buyers can see the kitchen, bathrooms, finishes, land size and location. They often cannot see whether the home is comfortable, efficient or expensive to operate.

This creates an information gap. Efficient homes may not receive clear recognition, and poorly performing homes may not reveal their future upgrade needs until after purchase or lease.

Home energy rating disclosure is one way to close that information gap over time.

How Home Energy Ratings help

Home Energy Ratings help by turning hidden performance into clearer information. They can help households understand comfort, thermal performance, whole-of-home energy use and upgrade opportunities.

DCCEEW explains that ratings for existing homes are intended to help householders understand their home’s energy performance, identify cost-effective upgrades, improve comfort and reduce energy bills.

For the pathway definition, see What Is NatHERS Existing Homes?.

The building fabric has to come back into focus

Many energy conversations jump straight to systems: solar panels, batteries, heat pumps, air conditioning or electrification. These are important, but they work best when the building fabric is not creating unnecessary demand.

Building fabric includes insulation, glazing, shading, draught sealing, roof performance, ventilation and passive design. If those elements are weak, the home may remain uncomfortable even with better systems.

For a practical overview, see Passive Design Improvements for Existing Homes.

Retrofit sequencing is one of the hardest parts

Existing homes rarely need just one upgrade. The harder question is what should happen first.

A poor sequence can create missed opportunities, such as:

• installing a large air conditioner before reducing heat gain
• adding solar before reducing avoidable demand
• renovating walls without improving insulation
• replacing windows without reviewing shading
• sealing draughts without planning controlled ventilation
• installing systems that do not match future building fabric improvements

A rating can support better sequencing by identifying the most relevant performance issues first.

Disclosure will make existing home performance more visible

Home energy rating disclosure is likely to increase the visibility of existing home performance in the property market. Instead of relying only on appearance, buyers and renters may be able to compare homes on comfort and energy performance.

This changes the market conversation. Energy performance becomes something that can be measured, explained and improved rather than guessed after moving in.

For disclosure context, see Home Energy Rating Disclosure in Australia.

Retrofit programs need reliable home performance information

Large-scale retrofit programs are difficult without reliable information about how homes currently perform. A rating can help identify which homes have poor thermal performance, high energy demand or clear upgrade opportunities.

This could support better targeting of incentives, staged upgrade programs, landlord improvements, social housing upgrades and electrification planning.

For the next policy article in this cluster, see How Home Energy Ratings Could Support Retrofit Programs.

Why Certified Energy sees this as a long-term industry shift

Certified Energy sees existing home performance as a long-term industry shift because it connects residential energy assessment, NatHERS, disclosure, renovation advice, retrofit planning and household energy use.

The industry will need more assessors, better data collection, clearer consumer education, stronger internal linking between assessment pathways and more practical guidance for homeowners and property professionals.

The challenge is not just to rate homes. It is to help Australia understand and improve the homes people already live in.

What homeowners can do now

Homeowners do not need to solve every performance issue at once. The first step is to understand the home as it currently performs.

Useful preparation may include:

• gathering available plans or property documents
• recording comfort issues by room
• checking known insulation information
• noting window, shading and draught problems
• recording heating, cooling and hot water system details
• collecting solar or battery information
• considering a home energy rating before major upgrades

For a preparation checklist, see What Information Do You Need for a Home Energy Rating?

FAQs

Why are existing homes a major building performance challenge?

Existing homes are a major building performance challenge because many were built before current energy efficiency expectations. They may have poor insulation, weak glazing, limited shading, draughts, inefficient systems and comfort problems that affect energy use, bills and emissions.

Why focus on existing homes instead of only new homes?

New homes are important, but most homes people live in already exist. Improving existing homes is necessary because the current housing stock will continue to shape comfort, energy bills, emissions and household resilience for decades.

How do Home Energy Ratings help with existing homes?

Home Energy Ratings help by making existing home performance easier to understand. A rating can identify comfort issues, energy performance gaps and potential upgrade opportunities for insulation, glazing, shading, draught sealing, systems and whole-of-home energy use.

What makes existing homes difficult to improve?

Existing homes can be difficult to improve because they vary widely in age, construction, renovation history, documentation, access, climate response, systems and budget constraints. A generic upgrade pathway may not suit every home.

Why are existing homes important for emissions reduction?

Existing homes are important for emissions reduction because residential buildings contribute significantly to electricity use and carbon emissions. Improving the performance of existing homes can reduce heating, cooling and appliance energy demand over time.

Why should homeowners care about building performance?

Homeowners should care because building performance affects comfort, running costs, upgrade decisions, resilience during heat and cold, future disclosure readiness and the long-term value of home improvements.

Existing Home Performance Review

Trying to understand how an existing home performs?

Certified Energy can help clarify whether a Home Energy Rating pathway is suitable for your property, renovation planning, sale preparation, retrofit strategy or disclosure readiness.

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