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Media Release |
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Buyers of Homes over $500,000 Take More Financial Risks
Wednesday, 15 December 2010 15:07
80% of homes are purchased without an inspection.
People purchasing homes over half a million dollars, who are usually trading up as second, third or fourth home buyers, and have an established financial position, are more likely to purchase a home without a property inspection.
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An Archicentre inspector checking the condition of the roof and guttering on a property for sale.Younger first home buyers, especially professionals with little equity but with more consumer awareness and very little margin to make financial mistakes generally take a more thorough investigation into the home they are buying, including undertaking a pre-purchase property inspection.
Archicentre, the building advisory service of the Australian Institute of Architects says on average around 80% of home buyers do not undertake a property inspection on the home they are purchasing.
Edward Lukac, South Australian Archicentre spokesperson said, "with the property market swinging back to favour buyers, and many properties being passed in at auction, rising interest rates and people renovating rather than moving, home buyers will have time and bargaining power on their side to limit risk in the future through the use of a pre-purchase property inspection."
Archicentre's national statistics, compiled from Archicentre's pre-purchase property inspections, show some 30% of homes for sale have faults which could cost several thousand dollars to repair. Some repairs, involving electrical or plumbing faults may need to be undertaken immediately, especially if safety is an issue for home owners.
Mr Lukac said, with DIY super funds becoming a major player in the property area, people buying a property to boost their retirement savings can quickly find their investment becoming a negative if they pay top price for a property which immediately needs repairs and maintenance before being able to be leased.
"Typically Archicentre often receives a call from home buyers who have moved into a home and very quickly discover their problems, such as cracking, leaky roofs, termites or re-stumping".
"Many of the more consumer orientated home buyers wanting to limit their financial exposure to unbudgeted faults utilise the pre-purchase inspection as a way of negotiating a better price or having faults repaired as part of the settlement process."
"In a buyers market it is sensible and prudent to make settlement subject to a pre-purchase property inspection so there are no surprises when you move into the property".
Mr Lukac said there are a number of reasons people undertake pre-purchase inspections including:
Archicentre's national pre-purchase home inspection statistics reveals all homes inspected had a range of faults including illegal building, rising damp, roof faults, faulty electrical wiring and cracking.
Archicentre 2010 fault statistics compiled from pre-purchase home inspections in each State
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Damp |
Framing |
Illegal Building |
Pier / Stump Faults |
Timber Rot |
Cracking |
Electrical |
Roofing |
Water Supply | |
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NSW |
47% |
24% |
29% |
18% |
36% |
40% |
31% |
37% |
9% |
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VIC |
32% |
20% |
30% |
31% |
45% |
43% |
33% |
53% |
15% |
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QLD |
32% |
16% |
22% |
22% |
33% |
20% |
21% |
31% |
8% |
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SA |
46% |
15% |
32% |
4% |
36% |
48% |
31% |
37% |
8% |
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WA |
30% |
15% |
21% |
11% |
20% |
36% |
19% |
30% |
12% |
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TAS |
25% |
9% |
34% |
13% |
22% |
44% |
25% |
40% |
10% |
Media Enquiries:
Ron Smith, Corporate Media Communications, Archicentre - Mobile: 0417 329 201