Analysis of Building thermal performance is necessary to predict comfort of the occupants in buildings and to identify the energy efficiency of the buildings. This study aims to study the impact of a new construction technology, incorporating the building envelop and internal walls, and examine the thermal performance of a residential building using smart construction materials in arid climate. The new envelop is technologically and environmentally sustainable and primary consists of, polystyrene, reinforced concrete, polystyrene and plaster board from inside and render from outside. The internal walls are made of compressed rice/wheat straws and are completely recyclable, biodegradable, and free from any chemical bonding elements, fire resistant and sound proof. An analysis and prediction of thermal comfort and energy consumption using DesignBuilder – based on state of the art building simulation software EnergyPlus, is carried out in a residential building located in arid climate region of Australia. Simulated results show that this novel envelop reduces heat gains in buildings by 1.64 kW/m2/month, increases the thermal comfort of building occupants and reduces the energy required by 140 kWh/m2/year to cool buildings.