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Investors are being slugged nearly $6,000 in additional costs due to poor construction standards leaving leaks, cracks and other defects, a report has found.
According to research released by Mozo, Australians have spent an additional $10.5 billion on such defects over the past decade alone.
Commenting on the report’s findings, Mozo’s property expert, Steve Jovcevski, said that “while buying a bright and shiny new property might seem like a good idea, the reality for many Australians is one of costly repairs and years of remediation”.
Internal water leaks, cracking to internal or external structures, water penetration from the outside, guttering faults, tiling problems and defective plumbing have been indicated as the most common problems for newer property owners.
“Australia is in the middle of the perfect storm when it comes to building defects,” Mr Jovcevski indicated.
He said the “construction boom that saw some developers and builders cut corners to meet demand coupled with the weakening of regulatory oversight has seen defects rain down on home owners”.
Mozo found that 58 per cent of apartment owners facing defects have had to contribute to a sinking fund and 25 per cent were forced to pay special levies to fund the repairs.
Most apartment repairs (57 per cent) were completed in under three months, but 21 per cent of buyers had to wait up to six months.
Nine per cent of affected owners are still waiting for the defects to be fixed.
Building defects tips and traps
Mozo’s report provided the following tips for investors to try to mitigate some of the costs caused by dodgy building practices.
Before you buy:
If buying off the plan:
After you buy:
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.