A property inspector has warned about the major defects Australians need to look out for before buying a new build, after Labor announced future investors will only benefit from negative gearing if they purchase a new property. Treasurer Jim Chalmers recently declared that from July 1, 2027, the tax deduction will apply exclusively to new dwellings for home buyers, not existing ones.
Who Built Your Home?
The first thing a buyer should ask is 'who built the property' and 'why are they selling it', the investigator noted. 'If it's an owner-builder, you have to be extra cautious because they are their own client,' he said. 'They can take shortcuts, and sometimes there aren't checks going on. He's got no company, no one to chase him personally, and it's a big headache for buyers.' At least with a registered builder, they have a massive liability. There are other projects going on, they've got a lot of things tied up, they are known.
Do Your Research
'Ask your buyer's agent about the builder. Research who they are. Check the building and plumbing commission,' Mr Khalil said. 'See if there's any disciplinary actions. Go to the court website, look up the builder, and see if there are any previous cases.' The inspector said the research is important to check if the builder is reliable, in case there is something that needs repairing after a purchase. 'You buy a new home, there's always going to be something wrong,' he added. 'The difference is that by choosing a good builder, they come back and fix the job. But, if you get a bad builder, the builder's not going to come back and fix it.'
Check the Paperwork
'Sometimes the contract of sale doesn't have the required documents inside,' Mr Khalil said. 'They could be missing a building permit, or an occupancy permit. Is there insurance on the property? Be sure you check.' He added that scrutinising the paperwork prevents hidden issues from resurfacing and causing trouble for the buyer later. 'Check what's going on before you even look at the property, because as soon as you tie yourself into this property, you might find yourself asking: "Where's my insurance? Who the hell is my builder? Who am I going to contact if I've got a defect?" There's a lot that may be honest mistakes, or may be deceptive conduct from the sellers, and homeowners are often unaware.'
Get Out Clause
'How can you get out of the contract if you do an inspection and find something wrong with the house?' Mr Khalil asked. He said that sometimes a major structural defect is present but not defined in the paperwork, which can cause problems. 'Ensure you put a clause with a definition of what the hell is going on there,' he said. 'Otherwise there's going to be a dispute later on when you try to get out of the contract.'
The Bathroom
Mr Khalil said bathrooms are a clear indicator of whether there is an issue with a new-build property, using the example of a pre-purchase inspection he did in 2024. He said his clients were inspecting a new-build property, which had temporary tenants before a long-term buyer was found. 'There were about five people living in the property with kids, but the bathroom hadn't been used,' he said. 'How could I tell the bathroom wasn't being used? I took out the drain cover, I looked inside, and there was a spider with a web inside the drain. I'm like, what the hell's going on here? These guys have got a leak in the shower, and they're not using it so the shower is dry.' He added that, if there are no tenants, it is still important to run the shower and make sure water hits the wall and corners, to see if it leaks outside the screen. 'Run the shower into places where there are junctions, where a vertical meets a horizontal, or in a corner,' he said. Mr Khalil warned that buyers who fail to spot these issues may face costly repairs. 'You're talking about a minimum, in our experience, of $30,000 to fix one bathroom if it's non-compliant in waterproofing,' the inspector warned. 'You have to rip out tiles, shower screens, and put in new plaster and waterproofing.'
The Balcony
Mr Khalil said he also found a 'major defect' on the balcony of the same property. 'The bedroom had a balcony, so I went inside and there were pillows along the sliding door on the floor,' he said. 'I removed them and, behind the curtain, there was mould under the carpet, there was a leak there.' Mr Khalil said mould and water leaks are 'major defects' because they require a lot of money to fix, especially with waterproofing and water ingress. 'Have a look at the sliding door or window seal, see if there is any swelling,' he added. 'Lift the carpet if you can and see if the nails are rusted.'
The Kitchen
Mr Khalil said an easy thing prospective buyers can do is bring a torch with them to inspect kitchen worktops. 'It's very common that we find the benchtops are broken, and then patched up,' he said. 'If you shine your light on an angle, you can see that they've patched up the stone. It's very common, especially where the cooktop or the sink is. The surface sometimes breaks, and they patch it up; you have to be aware you're buying a nice property, worth hundreds of thousands of dollars, and they've patched up a stone for you.' When I inspect homes in expensive areas like Toorak, Brighton or Bentleigh, I'm like, "You're selling the home for like over $2 and $3 million, why are you patching up the stone?" Just get a brand new one. He also said it is worth turning on both the sink tap and dishwasher to check for leaks and to ensure the plumbing is properly connected.
