The property market is ridiculously hot right now. In cities and in regional and rural areas, property prices haven’t experienced such growth in nearly twenty years. Homes are selling within hours of being listed, often sight unseen. And of more concern, homes are being purchased either without a building and pest inspection or with complete disregard for what the report contains.
In a seller’s market, where everything and anything is selling, and buyers’ judgement is fuelled by FOMO, a building inspection matters now more than ever.
Here’s why it’s not worth getting into the market at any cost.
Limited Number of Properties Fuels FOMO
With more people wanting to buy property than there are properties available, the fear of missing out (FOMO) is creating a market where people are making rash decisions without worrying about future-proofing their investment.
According to an article in Domain, inspection reports are actually up 30% in Sydney, but buyers aren’t always heeding red flags contained within building reports.
“Sometimes they don’t have any choice; they get the report, it says a few negative [things] but they still have to proceed … because it is really a sellers’ market.”
“Often the buyers have to put up with it because there are so many other buyers who will buy it no matter what.”
Other buyers are forgoing building and pest inspections altogether in order to get the sale completed before another buyer tries to make a move on the property. But this risky behaviour could end up backfiring on buyers down the track.
Home Buyers in Tasmania Taking Unnecessary Risks
Tasmania’s real estate market has also risen rapidly over the past 12 months due to a shortage of available properties and low interest rates fueling buyer demand. In Hobart, house prices rose by 8.7% over the past 12 months, and 13.8% in regional Tasmania. In a property market where there is no requirement for vendor disclosure or cooling-off periods (known as ‘buyer beware’), buyers are under pressure to take huge risks just to try and enter the market.
ABC News spoke to a young couple who have been trying to buy their first home in Launceston for five months. They have put in five unsuccessful offers so far, often foregoing building inspections or ignoring flaws.
“We almost got a place but then we found out that the huge shed in the back wasn’t council approved, and we were seriously considering still buying it, which, that’s a big risk.”
In a seller’s market, even problematic properties sell, and buyers are at risk of ending up with a lemon.
“What’s selling now is houses with steep topography, near electrical pylons, that normally you wouldn’t touch,” Ms Stier said. “That’s why in a strong market like now there is a disproportionate number of problematic houses on the market because now’s the time to sell them.”
Buyers should always perform their due diligence before buying any property, regardless of how much pressure they feel to close the deal. Pay attention to what your pre-purchase building inspection contains and talk to your building inspector about any concerns you have.
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