How to Build an Energy-Efficient Custom Home in Melbourne

An energy-efficient custom home certainly reduces your carbon footprint, but it also significantly lowers running costs, enhances year-round comfort, and increases your property's long-term value. As a custom home builder in Melbourne who understands the nuances of sustainable design, particularly the variable climate, Jem Homes knows that making informed choices from the outset is crucial.

Understanding the pillars of energy efficiency

At its core, an energy-efficient home is designed and constructed to minimise the need for artificial heating and cooling. This is achieved through several key principles:

  •  Passive Solar Design
    This involves orienting the house to maximise winter sun exposure (especially to north-facing living areas) while minimising harsh summer sun penetration through strategic shading and window placement.

  • Thermal Envelope
    Creating a highly insulated and airtight 'shell' is fundamental. This includes high R-value insulation in ceilings, walls, and floors, coupled with high-performance windows and doors.

  • Airtightness
    Preventing air leakage through gaps and cracks ensures that conditioned air stays inside and drafts are eliminated.

  • Controlled Ventilation
    While airtightness is key, fresh air is essential for health and comfort. Energy-efficient homes often incorporate mechanical ventilation systems, sometimes with heat recovery (HRV), to provide fresh, filtered air without significant energy loss.

  • Thermal Mass
    Materials like concrete slabs or internal brick walls can absorb and store heat, helping to stabilise internal temperatures day and night.

In Victoria, the Nationwide House Energy Rating Scheme (NatHERS) is the standard measure. As of May 2024, new homes must achieve a minimum 7-star NatHERS rating. A Whole-of-Home assessment, considering appliance energy use and solar generation, is also now required, demanding a holistic approach to efficiency.

Designing for Melbourne's climate

Melbourne's weather is famously variable, often experiencing four seasons in one day. Winters can be cold and damp, while summers bring periods of intense heat. An effective energy-efficient design must respond directly to these conditions:

  • Prioritise north-facing windows for living areas to capture free winter warmth. Minimise west-facing glazing, which cops the worst of the summer afternoon sun.

  • High levels of insulation are non-negotiable. Current recommendations often exceed minimums, suggesting R5.0+ for ceilings and R2.5+ for walls. Under-slab and slab-edge insulation are increasingly common for concrete floors.

  • Double glazing is now standard practice, offering significantly better insulation than single glazing. Look for units with thermally broken frames (to prevent heat transfer through the frame itself) and low-e (low-emissivity) coatings to reflect heat.

  • Effective summer shading is vital. Well-designed eaves, pergolas, external blinds, or shutters can block high-angle summer sun while still allowing lower-angle winter sun to enter.

  • Design for effective cross-ventilation using operable windows on different sides of the house. In highly airtight homes, a Heat Recovery Ventilation (HRV) system is often the best solution for continuous fresh air without energy penalties.

  • A well-insulated concrete slab can be very effective in Melbourne, absorbing daytime winter sun and releasing it slowly overnight. Internal brick walls can serve a similar function.

Building an energy-efficient custom home

Your focus should be on a careful selection of materials and systems. Beyond insulation and windows, using quality building wraps and sealing membranes (like VOC-free SIGA tapes) contributes significantly to airtightness.

 Here are some things to consider:

  •  Solar photovoltaic (PV) panels are essential for offsetting electricity use, particularly with Victoria's move towards all-electric new homes (since Jan 2024 for those requiring planning permits).

  • Reverse-cycle air conditioning (heat pumps) are highly efficient electric options for both heating and cooling.

  • Heat pump hot water systems are more efficient than traditional electric resistance or gas systems.

  • LED lighting throughout uses a fraction of the energy of older lighting technologies.

  • Choose appliances with high Energy Star ratings.

  • Install water-saving fixtures (taps, showerheads, toilets) with high WELS ratings. Consider rainwater harvesting for garden use or greywater recycling systems.

  • Prioritise sustainable, recycled, or locally sourced materials where possible to reduce embodied energy (the energy used to produce and transport materials). Jem Homes actively incorporates recycled materials like repurposed steel or reclaimed timber where appropriate.

The knock down and rebuild advantage

Undertaking a knock down and rebuild project presents a unique opportunity to maximise energy efficiency. While renovating older homes can improve performance, it often involves compromises due to the existing structure, orientation, or foundation limitations. 

Starting fresh allows you to position the new home perfectly on the block for passive solar gains. You can incorporate under-slab insulation from the beginning an design and build a highly insulated and airtight structure using the latest materials and techniques without legacy constraints.

We recommend seamlessly integrating efficient heating, cooling, ventilation, and water systems from day one and building to standards exceeding current minimums, ensuring long-term comfort and value.

Choosing your custom home builder in Melbourne

Achieving a genuinely energy-efficient custom home requires a builder with specific expertise and a commitment to sustainable practices. Look for builders who:

  • Demonstrate a strong understanding of passive design principles.

  • Are experienced with NatHERS assessments and achieving high star ratings.

  • Have proven processes for ensuring quality insulation and airtightness during construction.

  • Are knowledgeable about efficient systems (HVAC, hot water, solar PV) and sustainable materials.

  • Offer transparent communication and a collaborative design process.

Sustainable custom home design trends 2025

  • Biophilic Design
    Integrating nature through large windows, indoor plants, natural materials (wood, stone), and seamless indoor-outdoor flow enhances well-being and connection to the environment.

  • Sustainable Materials
    Increased use of recycled, reclaimed, bamboo, and low-VOC materials.

  • Smart Home Integration
    Technology used for convenience and optimising energy use (smart thermostats, lighting control, energy monitoring).

  • Minimalist Luxury
    Focus on quality over quantity, clean lines, functional layouts, and durable, timeless materials.

  • Wellness Spaces
    Dedicated areas for relaxation or health, promoting calm and utilising natural light.

  • All-Electric Homes
    Driven by regulations and efficiency gains, moving away from gas towards efficient electric appliances powered by rooftop solar.

Building a smarter future with Jem Homes

Building an energy-efficient custom home in Melbourne is a smart investment in your comfort, finances, and the planet's future. The key to doing this, however, lies in partnering with the right builder. Choosing experienced custom home builders Melbourne trusts, like Jem Homes, gives you the advantage of sustainable practices and a commitment to quality craftsmanship, so your vision for a beautiful, comfortable, and highly efficient custom home becomes a reality.

Connie Giordano