21 April 2009
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.
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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 has a Cost Guide on Repairs and Maintenance costs and Renovation costs on the website available to download at http://www.archicentre.com.au/pdf/0309AutumnCostGuide.pdf
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
