Summary
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31/08/2009
31 August 2009 Hot Market Increases
'Lemon' Risk
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Archicentre's General Manager, David Hallett said this risk is increasing with predicted rising interest rates in the future and home buyers need to be careful not to get an extensive repair bill with the mortgage. "However, many home buyers who have commissioned pre-purchase property inspections are submitting the results with cost estimations as part of the offer for a property, and others are making offers subject to a satisfactory building inspection report. "This is placing the buyer in the drivers' seat to protect their investment against illegal building or superficial cover up make-overs." Mr Hallett said that there is also a trend emerging with smart home buyers choosing to undertake pre-purchase housing inspections as a condition on settling a sale as part of their negotiation process. "Having a professional property report which details the faults in a home, the cost of repairs and the potential for renovation is a powerful negotiation weapon and can be used by home buyers having the price reduced on properties to cover repair costs. "With costs of tradespersons and materials blowing out, the margin for sloppy due diligence on property purchases is diminishing rapidly."
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The Archicentre Pre-Purchase Property report covers over 300 points on any home with architects carrying out inspections in the hard to see areas such as under the floor and in roof areas where often the most expensive repair costs for foundations, termites, plumbing, roofing repairs and wiring lurk for an unsuspecting buyer.
"A quick make over of a property may see new tiles in the bathroom and kitchen, but a look behind the scenes often reveals rotten timbers, sub-standard plumbing and wiring which can run into thousands of dollars to replace or repair, and in many cases requires the make over to be pulled out and re-done correctly," Mr Hallett said.
"Illegal building is a major investment hazard as people could lose thousands of dollars buying poorly renovated buildings or end up with serious legal settlement costs."
Archicentre's national statistics for pre-purchase home inspections show that illegal building is rife in Australia with almost 34% of homes inspected in Tasmania revealing some form of illegal activity.
2009 National Statistics on Building Faults from Archicentre Inspections
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VIC |
QLD |
WA |
NSW |
SA |
TAS |
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| 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% |
Mr Hallett said pre-purchase property reports are extremely prudent in the inner city areas of capital cities where housing stock is older with historic building practices and usually the property has inherited the traditional problems of dampness, cracking, termites, poor drainage or illegal building over the longer period of time.
"It is also the type of property which can attract substantial prices because of its location and proximity to the city," he said.
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
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PO Box 2412, Kew, Victoria, Australia. 3101
Tel: +61 03 9818 5700 Fax: +61 03 9818 5044
Email:newsdesk@medialaunch.com.auCopyright/Legal