First Home Buyers Warned on Bitter Twist of Lemon
Summary
21/04/2009
Archicentre News Release
21
April 2009
First Home Buyers
Warned on Bitter Twist of Lemon
First
home buyers extending themselves to the limit to get into a home could be could
be severely financially stung if they bought a LEMON, Archicentre, the building
advisory service of the Australian Institute of Architects said today.
An Archicentre architect conducting a pre purchase inspection on a property
for sale.
The
latest ABS figures show that in February 2009 first home buyers were borrowing
an average of $280,600, a massive $52,700 - 23% more than in 2008 which
severely limits any margin of error in relation to purchasing a home with
expensive faults.
David
Hallett, General Manager of Archicentre said Archicentre pre-purchase
inspection report statistics show that over 35% of over 120,000 homes
inspected over the past decade have defects, many of which are expensive
to fix.
"What
this means is when people purchase a home and are faced with hefty unplanned
repair or maintenance bills they are dramatically at risk of over-capitalising
and if not well planned and managed the purchase of the home ultimately
can turn into a loss.
"People
have usually borrowed to the limit and if expensive repairs are needed
this is normally added to the loan increasing the long term debt and limiting
financial return."
Mr Hallett
said only about one in ten people have a pre-purchase inspection on the
home they buy which is often their biggest financial commitment.
"In reality
people spend more time and money checking out a $10,000 car to be roadworthy
than an average home costing around $400,000 to $500,000."
Mr. Hallett
said that at the very minimum, prospective buyers should undertake their own
comprehensive inspection and could download a free do it yourself inspection
checklist from the Archicentre website at http://www.archicentre.com.au/survival_kit/diy_checklist2008.pdf
"At least with
a written property report you can assess what the real costs are and whether
you are in any danger of being faced with an excessive repair or renovation
bill whilst battling to pay your mortgage."
Mr Hallett
said that it is too late once you have signed on the dotted line and it is important
to have the inspection done before signing the contract, or in today's buyer
market sign the contract subject to the inspection reports outcome.
Archicentre's
national pre purchase home inspection statistics reveals all homes inspected
had a range of faults including illegal building, rising damp, roof faults and
faulty wiring.
2009
National Statistics on Building Faults from Archicentre Inspections
VIC
QLD
WA
NSW
SA
TAS
Illegal Building
30%
22%
21%
29%
32%
34%
Faulty wiring
33%
21%
19%
31%
31%
25%
Roofing
53%
31%
30%
37%
37%
40%
Rising damp
32%
32%
30%
47%
46%
25%
The Cost
of Repairs Renovation
costs:
Bathroom
$9,400 - $24,500
Kitchen
$10,400 - $31,100
Laundry
$4,100 - $9,700
Bedroom
$4000 - $8,300
Single room
20m2 $4,700 - $10,100
Restumping
(reblocking) Average 150m2 house $5,200 - $9000
Re-roofing
$6,500 - $10,000
Eg. Colourbond
Rewiring
$5,900 - $8,800
Plumbing
- complete house replumbing $7,650 - $12,140
Archicentre
is conducting free seminars for home buyers:
6.30pm - 8.30pm Wednesday 27th May 2009
Home Buying - Ten Things You Should Know about Buying a Home
The seminar will cover how to find a home, how not to buy a lemon, investing
right, how to make a profit and take questions from the audience.
Venue for the seminar: Home Ideas Centre, 1686 Princes Highway, Oakleigh
East. Bookings are essential please call Archicentre on 1300 13 45 13.
Media Enquiries:
David Hallett
General Manager Archicentre (03) 9819 4577 Mobile: 0439 439 115 Ron
Smith Corporate Media Communications Archicentre (03) 9818 5700 Mobile: 0417
329 201