First-time buyers susceptible to defective properties, expert warns

A buyer’s agent has pointed out that the current property climate makes first home buyers more vulnerable to purchasing defective and unsaleable properties.

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According to Michelle May, principal of Michelle May Buyers Agents, young people are choosing to buy apartments because they’re the only type of property within their reach.

Acknowledging that this provides freedom from the “savage rental crisis”, which is appealing for this group, Ms May advises home buyers against falling into the trap of buying properties that are too new or off the plan.

“In their rush to get onto the property ladder, buyers are getting sucked into buying lemons,” she remarked.

Ms May cautions “the young and vulnerable are in danger of swapping one set of problems for another in the form of shiny new apartments”.


Data from an NSW government strata survey revealed that defects in new properties are common. It stated that more than half of newly registered buildings since 2016 have had at least one serious defect costing an average of $331,829 per building to fix.

Highlighting the prevalence of defects in new properties, one such recent example is the serious defect found in the Macquarie Park Lachlan’s Line apartment complex, of which there are 900 units.

The rectification notice explained that the defect was “likely to cause the basement slab to fail, namely to fracture and collapse, leading to the destruction of the building or any part, or the threat of collapse of the building or any part”.

Looking at the current market, Ms May described the state of the construction industry as a crisis holding consumers hostage in it.

Between 2019 and 2021, the NSW Fair Trading received an average of 11,000 complaints per year regarding poor-quality construction, loss or damage to consumers’ property, misleading or deceptive conduct, and unlicensed tradies.

Couple this with inflation, Ms May explained the cost of materials and labour has seen the collapse of thousands of construction companies.

ASIC figures showed that the number of failed businesses in construction has surged in the last year, with an average of two companies folding every day the highest level of insolvency in construction in a decade.

The buyer’s agent also noted that while lessons are being learnt on the risks of buying new, there is a greater appeal for well-preserved older properties, consequently driving prices up.

She shared some of the reasons why older properties are rising in value, such as the fact they were “built in an era where craftsmanship standards were higher, [and] many of these vintage gems are located in established neighbourhoods with a strong sense of community and potential for steady appreciation”.

“And unlike cookie-cutter new apartments, older apartments tend to be in smaller blocks with less costly strata fee overheads for facilities that one wants or uses. Older houses offer opportunities for renovation due to bigger land blocks, more space and more flexible layouts, with high ceilings and period details always remaining in fashion and highly prized.”

While for some, looking to established and older builds could be a solution to the problem, Ms May doubled down on the idea that there is “no happy ending for those who have been saddled with the burden of a defective and unsaleable property”.

In NSW, the building commissioner may broker a deal with owners and developers, however Ms May said “the government’s track record of holding developers and builders accountable doesn’t engender much hope”.

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