Do Banks support green homes
Recent research that has been published seems to suggest that home owners or buyers to be more direct, in the South African context, do have a keen interest in greening their homes. Not simply as supporters of the green movement alone, but also and most importantly, due to the energy efficiency that comes with greening one’s home.
This is true, says a research commissioned by South African property company, Century Properties Development. The development company research reports indicates that whilst bankers were more concerned about risks associated with lending, buyers also rate energy efficiency including self-sustainability as one of the most important issues in home selection. Compare this study, with the fact that South African records say at least a total of 28% of the sum of the country’s emissions coming from buildings.
I don’t see any evidence that our South African banks are making an effort to incentivise home buyers in South Africa to opt for green homes. In some parts of the developed world, there appears to be a concerted effort to encourage home owners and buyers to employ energy-efficient systems for new or existing homes. Some refer to this incentive as a “green mortgage” that is, banks at times use this incentive for home buyers to go green. In my understanding of how banks structure this, a green mortgage provides the home buyer a money-saving discount as a reward for making energy-efficient improvements in an existing home or for buying a home that meets particular energy-efficiency standards. Green mortgages hinges on the principle that a more energy-efficient home means lower utility bills. Where there is an incentive that pulls the home buyer into implementing improvements in an existing home or buying a home that is already energy-efficient, the results can be comforting in this time of high costs especially of electricity amongst others in South Africa.
In response to this argument that South African banks are not seen to be supporting the greening of homes through home loans, a Business Day report quoted Standard Bank home loans head Steven Barker as disputing the assertion that banks have a ‘negative attitude towards green buildings,’ instead saying that Standard bank for example, encourages improvements in existing property with such devices as solar water heaters and heat pumps.
There is a need to make green homes bankable through an active participation of South African banks in providing incentives to home buyers and existing home owners that will give further rise to the greening of homes. After all, having lower utility costs should make the investment worthwhile for everyone involved including our banks. The property, once it has been fitted with energy efficient devices and systems, should be worth more than its original value. Perhaps the real question we need to ask the banks is exactly how bankable they view “green homes” in this context?
Written By Zanele Mlambo
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