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    Default Stigma of leaky buildings hits owners of dry homes

    Hi Guys

    Interesting news item in this morning's NZ Herald about leaky house stigma:

    Stigma of leaky buildings hits owners of dry homes
    11.06.05
    By Anne Gibson

    House-buyers appear to be rejecting monolithic-clad homes - widely associated with leaky building syndrome - with the values of such properties rising more slowly than other types in Auckland.

    Property expert Dean Humphries is about to launch a major probe into the stigma attached to leaky buildings to find out how much values are hit.

    Mr Humphries has already investigated property values in a small group of Auckland homes built between 2001 and last year.

    Their values rose much less than others throughout the whole market, he said. Auckland residential values rose 31 per cent in that period, but the houses in the study increased just 5 to 12 per cent in value.

    Although many houses clad in this way did not leak, owners had found their values hurt, he said.

    "Purchasers are becoming more discerning over the houses they are buying in light of the increased attention to leaky homes in the last year.

    "The question is, does a house constructed with elements prone to leaky house syndrome suffer from what we in valuation call stigma?"

    International studies had showed monolithic-clad houses suffered lower rents, higher vacancy rates and more maintenance expenses than houses clad in other materials, he said.

    "If stigma can be proven, there could be more than 50,000 homes in Auckland that could object to their valuation assessments for rating purposes on the basis that their home suffers stigma."

    Professor Bob Hargreaves, director of Massey University's real estate analysis unit, had presented survey results last March showing the impact of leaky home syndrome on property values, Mr Humphries said.

    But the survey was based the opinion of professionals working in the industry, rather than sales data.

    A research paper from an Auckland University property department graduate on Hamilton houses showed no difference in property values between monolithic-clad houses and others, Mr Humphries said.

    "Much more work is required in this area."

    Bernie Fuller, Leaky Homes Action Group chairman, welcomed the study proposed by Mr Humphries.

    He said monolithic-clad houses were rejected by many buyers, took longer to sell and were marked down in price by 10 to 15 per cent "minimum".

    Mr Humphries is a senior lecturer in property valuation at Auckland University. He is also director of valuation and advisory services at international real estate consultancy Jones Lang LaSalle.

    Wary Buyers

    People wanting to avoid leaky buildings syndrome reject houses with:

    * Monolithic cladding.

    * No eaves.

    * Internal decks.

    * Situated in a high wind zone.

    * A flat roof.

    * Untreated, kiln-dried timber.
    News source:
    http://www.nzherald.co.nz/print.cfm?objectid=10330132

    Regards
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


 

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