With Australia’s plans to shift from a highly dependent, coal-based economy to zero net emissions by 2050, renewable energy talks are gaining traction in the property investing space.
Several renewable energy projects across Australia over the past few years seemed to have a significant impact on property values, according to a report from PRD Research.
While residing in proximity of a renewable energy plant might not be ideal, having one in an LGA seemed to have a strong benefit not just on property prices but on the overall cost of living of residents.
“While the fiscal growth solely from proximal plants is small at around 3% across the property’s lifespan, it can significantly raise a region’s property value. Property values rise due to the increased demand created in the area. The value of a home may also increase with the installation of solar panels,” the report said.
Below are six examples showing how renewable energy initiatives (constructed in 2017) helped boost median prices in some LGAs in New South Wales and Victoria:
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House price growth in LGAs with existing renewable initiatives |
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LGA |
Energy Type |
Median Price in 2017 ($) |
Growth (%) |
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|
1-Year |
2-Year |
5-Year |
|||
|
Broken Hill, NSW |
Wind |
99,750 |
16.8 |
18.4 |
43.8 |
|
Glenn Innes, NSW |
Wind |
205,750 |
2.0 |
-6.9 |
34.7 |
|
Griffith, NSW |
Solar |
320,000 |
4.5 |
12.3 |
36.0 |
|
Colac Otway Shire, Vic |
Wind |
352,250 |
4.8 |
-0.6 |
44.9 |
|
Upper Lacklan, Vic |
Wind |
294,000 |
-1.4 |
8.1 |
51.0 |
|
Moorabool, Vic |
Wind |
440,000 |
12.0 |
15.4 |
36.7 |
Multiplier effect of renewable energy
According to PRD Research, renewable energy is an unlimited resource, which make it likely to produce a multiplier effect on property prices.
Furthermore, there is evidence that renewable energy initiatives also impact other aspects of the market and the overall economy.
The LGAs listed in the table were able to benefit from developing and constructing renewable energy plants.
“This has led to higher rental yields, population growth, wage price growth and lower unemployment rates because of investment into the domestic economy,” the report said.
“Overall, these demographics have improved, which is a positive sign for investors, as a strong tenancy base can be created and maintained under these indicators.”
The goal of renewable energy to reduce cost of power consumption is a strong driver of demand for housing, especially given the rising inflation that have increased living expenses.
Below are some future renewable projects how they are likely to boost property prices based on the 2022 median data:
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Photo by hpgruesen on Pixabay.
