What are the benefits of investing in green homes?

Perhaps nowhere is that more the case than in Singapore, an island nation that has re-modelled itself as a garden city in little more than half a century.

Since the 1960s, Singaporeans have embraced the expansion of its green space skywards through high-rise terraces and connected gardens. The physical constraints of the island meant there was little choice other than to opt for high-density development – but with an emphasis on sustainability.

Around the world, rising energy costs and growing public awareness of climate change have led to a boom in sustainable housing.

The role that the built environment plays in global emissions is highlighted by the nonprofit organisation The Climate Group.

It says 40% of global greenhouse gas emissions come from buildings[@global-greenhouse-gas-emissions].

Green homes and commercial buildings have a big part to play in driving the clean energy transition. And they also offer many benefits if you're thinking about investing in property or a buying a home in Singapore or abroad.

They’re becoming more financially attractive for several reasons:

Green homes are also sometimes called sustainable homes or eco-homes. The same concept also applies to workplaces such as offices. 

They're built with environmentally responsible features, minimising their impact on the planet.

Standards for sustainable buildings can vary in different places, but in general they're designed to:

Green buildings can have lower ‘embodied carbon’ – that refers to the emissions generated through production and use of materials like cement and steel. They can also have reduced ‘operational carbon’ from lower emissions from ongoing energy use. 

They might feature:

In Singapore, the government's Green Mark Incentive Scheme recognises buildings that follow sustainable practices.

The Building and Construction Authority (PDF) says green homes can have a positive impact on health. For example, they can reduce respiratory illnesses by improving air quality and combat stress by providing restorative spaces and encouraging more physical activity.

Green buildings matter because they're more energy-efficient and use more renewable energy sources, reducing our dependence on fossil fuels. According to National Geographic, health benefits of green buildings include making the most of natural light, which helps better sleep, and using noise reduction materials in offices, improving productivity.

Green mortgages are a way of financially rewarding you for buying or owning an energy-efficient home. 

They have more favourable terms if you can show that the property you’re buying meets certain environmental standards.

Lenders tend to see green mortgages as having a higher long-term value, so you might be offered lower interest rates and in turn have lower monthly repayments.

HSBC Singapore offers Green Mortgages for properties that have achieved the Green Mark Gold^PLUS award or above.

This means you can get an evergreen waiver of conversion fee for repricing.

You can check if a property has a valid Green Mark award by visiting the Green Mark Buildings Directory, or by getting in touch with our Mortgage Specialists.

In Singapore, initiatives like the Green Mark Incentive Scheme make sustainable properties more financially attractive.

It offers grants for improvements that make your home more energy efficient. This support can significantly reduce upfront costs and improve the return on investment in green homes, particularly those meeting Super Low Energy or Zero Energy standards.

Many other countries and regions also have their own schemes where house buyers can get preferential terms if they can prove the property meets certain environmental standards.

There are now more than 90 Green Building Councils around the world working with planners, policy makers, developers, building owners and tenants on promoting the development of new sustainable buildings and retrofitting existing buildings to meet sustainability standards.

The Green Mark Incentive Scheme is part of the Singapore Green Building Masterplan, which is designed to speed up the transition to a low-carbon future. By 2030, it aims to make 80% of Singapore’s buildings ‘green’ and 80% of new developments ‘Super Low Energy’. 

Denise Chan, Director Climate Transition for HSBC, said: "It's interesting to see how in some markets, the regulator is setting the bar high for the percentage of homes that need to be green. 

“This could mean that a green home becomes a norm in these markets. It shows a high level of ambition which investors need to take into account when designing their portfolio.”

“Following this momentum, we can expect that buildings that are not up to the standard may experience a brown discount in the longer terms.”

Denise Chan said: "There is a positive trend we observe globally, which is true in Asia-Pacific, where investors continue to place a higher green premium on properties that meet sustainability standards."

This is particularly the case in Singapore and Australia, where there are government regulations and incentives to promote new buildings to be certified as green. That means green homes are starting to become the norm across the region[@cbre-2025-survey].^{Footnote link 2}

As environmental concerns grow, buildings that are more sustainable are becoming more marketable. There's also evidence that green homes can attract tenants more easily and attract higher rents and sale prices, according to the World Green Building Council.

Green buildings can also benefit from lower running costs and energy bills, which are valued in the rental market. According to National Geographic, green buildings can lead to a 20% drop in maintenance costs and 17% increase in occupancy rates. All these factors can increase the likelihood of positive long-term investment returns.

In contrast, properties that are not green might attract an unwanted ‘brown discount’, meaning they might rent or sell for less. In addition, properties in locations with a high risk of extreme climate events – such as flooding and storms – may become harder to insure. 

According to UK-based Building Atlas, brown discounts can be as high as 10% and 20%, especially for office and retail buildings.

On the other hand, initial costs for green building can be higher than with conventional buildings because green construction can be more complex and low-carbon building materials are not always as readily available as traditional ones.

There can also be higher maintenance costs with green buildings because they often have sophisticated systems such as smart lighting that need skilled technicians to look after them.

Singapore ranks highly for green homes because of its goal to achieve net zero built environments by 2050.

But it's not alone. Around the world, there are green or energy-efficient mortgages available in many other countries and regions that might be of interest to investors from Singapore.

Find out more about the certifications used in these markets:

Find out more about our international mortgages.