Three years ago, I’d mention a property’s NatHERS rating during an open home and get blank stares. Maybe one in twenty buyers would even know what the acronym stood for. Today? I’m getting asked about it before they walk through the front door.

Something has shifted. And it’s not just greenwashing or virtue signalling — there’s money behind it now.

The Numbers Are Getting Hard to Ignore

The Clean Energy Finance Corporation published research in late 2025 showing that residential properties with higher sustainability ratings are achieving premiums of between 3% and 10% over comparable properties. That’s a wide range, and it varies significantly by location and property type. But the direction is clear.

In my own experience across inner-city Sydney, the effect is most pronounced in the $1.5M to $3M bracket. This is where buyers tend to be younger professionals or young families who care about energy costs, have environmental values, and are financially literate enough to think about long-term operating costs rather than just the purchase price.

An apartment I sold in Surry Hills last month is a good example. Two-bedroom, early 2010s build, nothing remarkable architecturally. But it had a 7.5-star NatHERS rating, solar panels feeding into the body corporate’s shared battery, and an annual energy cost that the seller could document at under $600. It went for $82,000 above what I’d have expected based on comparable sales in the same building. The buyers specifically told me the energy performance was a major factor.

What Ratings Actually Mean

Let me clarify the landscape, because it’s confusing even for people in the industry.

NatHERS (Nationwide House Energy Rating Scheme) rates the thermal performance of a home’s building shell on a scale from 0 to 10 stars. It’s about how much heating and cooling you’ll need based on the design and construction. New builds in most states now need to hit 7 stars minimum under the National Construction Code requirements updated in 2023.

NABERS (National Australian Built Environment Rating System) is more common for commercial and multi-unit residential. It rates actual measured energy and water use, plus waste management and indoor environment quality.

Green Star from the Green Building Council of Australia applies mainly to larger developments and rates overall environmental design and construction quality.

For residential buyers and agents, NatHERS is the one you’ll encounter most. And the gap between a 6-star home (the old minimum) and an 8-star home is genuinely significant in terms of living comfort and running costs.

Why It’s Hitting Sydney Harder Than Other Markets

Sydney’s property market has some characteristics that amplify the sustainability premium. First, energy costs in NSW have risen substantially — the Australian Energy Regulator data shows residential electricity prices up roughly 35% over the past three years. When your quarterly bill jumps from $400 to $540, suddenly a home that costs less to run becomes very attractive.

Second, Sydney summers are getting more intense. The difference between a well-insulated home with good glazing and a poorly performing one isn’t academic when it’s 42 degrees outside. A 5-star home might need three split systems running constantly. An 8-star home might need one, intermittently.

Third, Sydney buyers at the mid-to-upper price points tend to be well-educated and environmentally aware. They read the IPCC reports. They know what an EV charger needs. They think about embodied carbon.

What This Means If You’re Selling

If your property has strong sustainability credentials, for goodness’ sake, put them front and centre. I’m seeing agents bury NatHERS ratings in the fine print of property descriptions, or not mention them at all. That’s like having harbour views and forgetting to photograph them.

Document everything. Get a copy of the energy rating certificate. Pull together any data on actual energy costs — quarterly bills, solar generation records, water consumption figures. Buyers who care about this stuff want evidence, not claims.

If your property doesn’t have great sustainability credentials, be honest about it. Buyers can see through greenwashing, and overstating performance will come back to bite you during building inspection.

The Retrofit Question and What’s Ahead

Retrofitting an older home is possible but expensive — $30,000 to $60,000 for double glazing, insulation, and sealing. Whether the premium justifies the investment depends on your starting point and how long you’ll hold the property.

The regulatory trajectory is clear: standards are only going up. The NCC’s 7-star minimum will likely move to 8 stars in the next revision. Disclosure requirements are expanding. And buyer expectations are rising faster than regulations.

I don’t think we’re far from a point where a low sustainability rating becomes a genuine impediment to sale. Properties that ignore this trend are going to age badly in every sense of the word. In Sydney real estate, sustainability is becoming table stakes.