7 Star Energy Rating – What it means for your new home build

Since 1 May 2024, all new homes in Victoria have been required to meet the 7-star minimum thermal performance under the Nationwide House Energy Rating Scheme (NatHERS). This rating measures how well the home’s design keeps indoor temperatures comfortable using as little heating and cooling energy as possible.

The National Construction Code of 2022 also included changes that added a new requirement called Whole-of-Home, which sets annual energy-use limits for fixed appliances such as heating and cooling systems, hot water, lighting, and pool or spa equipment.

For buyers, this means every new home must now be more comfortable, efficient, and affordable to run. At Sienna Homes, energy performance isn’t an add-on. 7-star thermal design and all-electric readiness are integrated into our townhouse planning from day one, so you get a compliant, well-performing home without the stress or extra cost.

What is NatHERS?

The Nationwide House Energy Rating Scheme (NatHERS) is Australia’s national framework for measuring the thermal performance of new homes. Instead of looking at materials alone, NatHERS uses computer modelling to estimate how much heating and cooling energy a home will need to stay comfortable throughout the year.

Homes are rated from 0 to 10 stars:

• 0 stars: this means the home offers virtually no insulation from outside temperatures.
• 10 stars: the home is designed to require almost no artificial heating or cooling
• 7 stars: now the Victorian minimum – this represents a home with noticeably improved comfort, stable temperatures, and significantly lower running costs

NatHERS looks at how the home will perform in its specific climate. For Victoria, this includes cool winters, warm summers, and rapidly shifting temperatures. The software they use also considers details such as:

• The orientation of the home
• Window size, placement, and glazing
• Insulation levels
• Shading and eaves
• Construction materials
• Room layout and zoning

The result is a thermal performance score, which tells you how efficiently the home can maintain comfortable temperatures. For buyers, a higher star rating means a better-performing home with fewer energy spikes and more predictable bills, something especially important during Melbourne’s cool winters and hot summer days.

History

Australia’s push for more comfortable, energy-efficient homes has evolved over several decades:

1993

NatHERS was created by the Australian & New Zealand Minerals and Energy Council, working with state governments and CSIRO. The goal: to standardise the way homes are assessed for thermal performance.

2003

Energy-efficiency provisions were added to the Building Code of Australia (BCA) for the first time, marking a national shift toward better-performing homes.

2010 (1st May)

States and territories formally adopted the BCA, introducing a minimum 6-star requirement for new houses and townhouses (Class 1 buildings). This became the standard benchmark for more than a decade.

2022

The National Construction Code (NCC 2022) increased the minimum from 6 to 7 stars and introduced Whole-of-Home energy budgets, a major step toward lowering household energy use.

Ongoing strategy

The national Trajectory for Low Energy Buildings sets the long-term path toward zero-energy and zero-carbon-ready homes across Australia.

1 May 2024

Victoria officially mandated the NCC 2022 requirements, meaning all new homes must now achieve 7-star thermal performance plus Whole-of-Home compliance, along with support for efficient electric hot water and all-electric living.

What’s changed from 6-star to 7-star

Moving from 6 to 7 stars may sound small, but the impact is significant. A 7-star home can reduce heating and cooling demand by up to as much as 25%, leading to more stable temperatures and lower running costs.

The jump from 6 to 7 stars also encourages improvements such as:

• Better-positioned living spaces for winter sun
• Higher-performing insulation
• Double glazing as a standard expectation
• Improved shading and eave design
• Smarter room zoning
• Reduced heat loss through walls, roofs, and windows

But the biggest change in the NCC 2022 update was the introduction of Whole-of-Home.

Whole-of-Home doesn’t measure the building shell, it looks at the energy use of fixed appliances, including:

• Heating and cooling
• Hot water systems
• Lighting
• Pool and spa pumps (if applicable)
• On-site energy generation such as solar PV

Homes must meet a target score that keeps annual energy consumption within efficient limits. This pushes new homes towards efficient electric systems, modern heat pumps, and solar-ready design.

Together, the 7-star thermal minimum and Whole-of-Home measurements create homes that are not only better for comfort, but meaningfully cheaper to run, especially important as energy prices rise.

7-star energy rating requirements in Victoria

To comply with Victoria’s 2025 building regulations, every new Class 1 home must meet two key requirements:

1. A minimum 7-star NatHERS thermal rating

This covers the building’s design, its ability to naturally stay warm in winter and cool in summer. The rating is influenced by orientation, insulation, glazing, materials, shading, and room layout.

2. A compliant Whole-of-Home score

This measures the expected annual energy use of your fixed appliances. Efficient, electric systems help ensure the home meets the required target.

So, what does this look like in practice?

Take a typical Melbourne townhouse design:

• Living spaces placed upstairs on the north or east side capture more winter sun.
• Bedrooms downstairs stay cooler in summer.
• Double-glazed windows reduce heat loss.
• Insulation is upgraded in walls, ceilings, and sometimes between floors.
• Eaves or balcony shading prevents summer overheating.
• An efficient electric heat-pump hot water system reduces energy use dramatically.
• LED lighting and modern heating/cooling systems keep the Whole-of-Home score low.
• Optional rooftop solar improves efficiency further and gives more flexibility for appliance selection.

The result is a home that complies comfortably, one that’s brighter, more comfortable, cheaper to run, and better aligned with Victoria’s transition toward energy-efficient living.

How does Sienna Homes design townhouses to meet the 7-star?

At Sienna Homes, energy performance isn’t a last-minute compliance challenge; it’s embedded in the way we design and plan every townhouse. Our goal is simple: create homes that are comfortable, efficient, and ready for Victoria’s future energy standards.

Built-in 7-star performance

Our design process begins with a focus on thermal performance:

• We position living areas to capture natural light where possible.
• Double glazing and upgraded insulation are part of our standard townhouse design approach.
• Layouts are arranged to balance winter warmth with summer shade.
• Materials are selected for durability and energy efficiency, tailored to Melbourne’s climate zone.

Because we work with compact and sometimes challenging blocks, especially in new estates, our team uses smart orientation, zoning, and window placement to maximise performance even on narrow lots.

Whole-of-Home ready

We specify efficient electric systems, including hot water, heating and cooling, to ensure the home meets Whole-of-Home requirements. Solar can be added for even better performance and lower running costs.

A seamless, fixed-price process

For buyers, the biggest advantage is that 7-star compliance is already built into our townhouse standards. You don’t have to make complex technical decisions or negotiate upgrades just to meet minimum requirements. Everything is incorporated into a clear,
fixed-price turn-key package.

This means you get a home that’s:

• Comfortable year-round
• Efficient to run
• Ready for an all-electric future
• Designed to meet Victoria’s 2025 standards without surprises

FAQs

What’s the difference between 6 and 7-star?

A 7-star home requires significantly less heating and cooling energy than a 6-star home. It’s better insulated, better oriented, and more comfortable throughout the year.

What is a NatHERS certificate?

It’s an official document issued after modelling, showing the home’s star rating and confirming it meets thermal performance requirements.

Do I need solar to pass Whole-of-Home?

Not always. Many homes meet Whole-of-Home without solar, but solar can help improve the score and reduce long-term energy bills.

When did 7-star become mandatory in Victoria?

On 1 May 2024, Victoria adopted NCC 2022 standards, including the 7-star minimum and Whole-of-Home energy requirements.

Can reverse living help reach 7-stars?

Yes. Reverse living (where living areas are located upstairs) often improves access to winter sunlight and natural ventilation, which can boost thermal performance, especially on compact lots.