Victoria Aims to Ease Home Buying with Mandatory Inspection Reports
The Victorian government has unveiled a proposal to mandate building and pest inspection reports for property sales, a move designed to alleviate financial burdens on home buyers. This initiative, announced by Premier Jacinta Allan, would require vendors to organise and cover the costs of these reports, making them accessible to all potential purchasers.
High Costs for Buyers Highlight Need for Reform
Research indicates that building inspections typically range from $500 to $700, but many buyers incur much higher expenses. For instance, Toshi, a first-time home seeker in Melbourne, spent over $3,000 on six inspections over 18 months. One report revealed structural damage in a property she had offered on, saving her from a costly purchase.
"I was very lucky to have that clause in the contract," Toshi remarked, emphasizing how inspections can prevent financial pitfalls. Another buyer, Bronwyn, spent about $2,400 on reports during a three-month search, though she expresses skepticism about the plan, fearing it might create a false sense of security due to vendors' vested interests.
Government Cites Consumer Research to Support Changes
The proposal is backed by a 2022 Consumer Policy Research Centre report, which shows that almost half of buyers pay for multiple inspections while house hunting. About 17% obtain seven or more reports, while another 17% forgo inspections entirely due to cost and inconvenience.
Consumer Affairs Minister Nick Staikos stated that consultation on the proposal will begin this year with stakeholders and the ACT government, the only Australian jurisdiction currently requiring such reports. Details on report contents, accreditation, and conflict safeguards are still being finalised but will include checks for structural soundness, mould, termites, and leaks.
Industry Veteran Calls Reform "Long Overdue"
Robert German, director of Full Circle Property Advocates with 40 years of experience, supports the reform as "long overdue" and urges other states to follow suit. He notes that some buyers spend up to $7,000 on reports, partly due to underquoting issues where properties sell above quoted ranges, misleading bidders.
Additional Reforms Target Underquoting in Property Market
In a related effort, the Victorian government announced new underquoting laws to be introduced in June, requiring sold prices to be made public. Staikos explained that non-disclosure distorts the market, making it harder to combat underquoting. The Real Estate Institute of Victoria welcomes these changes but opposes a proposal to force sellers to disclose reserve prices seven days before auctions, advocating for three business days instead.
New South Wales is also considering mandatory inspections, with Minister Anoulack Chanthivong stating openness to policies that ease home buying and ensure value for money.
Success Story Amidst Challenges
After a prolonged search, Toshi finally found her home through a pre-market opportunity, securing it after a positive inspection showing only normal wear and tear. She receives the keys next week, highlighting how thorough inspections can lead to successful outcomes despite initial costs.
