The $500 That Could Save You $50,000: A Buyer’s Guide to Building Inspections

Australia’s residential property market is now worth over $12 trillion. The average dwelling costs more than $1 million. And yet, in competitive markets, buyers are still waiving building inspections to get their offers accepted faster. It’s the equivalent of buying a car sight unseen because the salesman said it “drives beautifully.”

A building inspection is one of those rare situations in property where a relatively small outlay — typically $400 to $800 — can genuinely protect you from a five- or six-figure disaster. Termite damage alone averages over $10,000 to remediate. Foundation repairs can run into the tens of thousands. Rewiring an entire house can exceed $20,000. And in NSW alone, building defects cost the industry an estimated $700 million per year.

This guide covers what a building inspection actually involves, what it costs, what inspectors tend to find, and how to use the results strategically — whether you’re buying your first home, adding to an investment portfolio, or just making sure your current property isn’t quietly deteriorating.

What a Building Inspection Actually Is (and Isn’t)

A building inspection is a systematic, professional evaluation of a property’s physical condition. A licensed inspector works through the property from the roof space to the subfloor, examining the structure, systems, and surfaces for defects, damage, safety hazards, and signs of deterioration.

In Australia, standard building inspections follow AS 4349.1, the Australian Standard for pre-purchase inspections. This gives the process a consistent framework, but the quality of the actual inspection varies enormously depending on who you hire — more on that later.

It’s important to understand what an inspection is not. An inspector provides a snapshot of visible and accessible conditions on the day. They don’t dig up floors, pull apart walls, or test every power point with lab equipment. They can’t see inside sealed wall cavities or under permanent floor coverings. They aren’t plumbers, electricians, or structural engineers — although they’ll tell you when one of those specialists should be called in.

Think of it as a comprehensive health check-up rather than an MRI. It won’t catch everything, but it will catch most of the things that matter — and the things it can’t see, it will flag for further investigation.

What It Costs Across Australia

Building inspection costs vary based on property size, location, age, and the type of inspection you need. Here’s a realistic snapshot of what you should expect to pay in 2026:

Regional areas tend to sit at the lower end. Metro Sydney and Melbourne are typically at the higher end. Larger or older properties with more complex construction — think double-storey Queenslanders, heritage-listed terraces, or multi-level split homes — will push toward the top of those ranges.

Some inspectors offer add-ons at extra cost, including thermal imaging scans, asbestos sampling, mould air-quality testing, drain camera inspections, and pool safety compliance checks. Whether you need these depends on the property, but a combined building and pest inspection is the bare minimum for any purchase.

To put the cost in perspective: on a $750,000 property, a $600 inspection represents 0.08% of the purchase price. Stamp duty alone will cost you 20 to 50 times more. It is, by any measure, the cheapest form of insurance available in the entire transaction.

The 6 Things Inspectors Find Most Often

Every property is different, but certain issues show up with remarkable consistency in Australian inspection reports. Knowing what to expect helps you distinguish between normal wear and genuine red flags.

1. Moisture and Water Damage

Water is the silent destroyer of Australian homes. It rots timber framing, breeds mould, degrades plasterboard, and creates the perfect conditions for termite infestation. Inspectors look for evidence of water intrusion through roofs, walls, windows, failed waterproofing in bathrooms and laundries, and rising damp through foundations. Professional inspectors use moisture meters to detect dampness that isn’t visible to the naked eye — behind tiles, inside wall cavities, and under floor coverings. A bathroom that looks perfectly fine can have catastrophic waterproofing failure behind the scenes, especially in properties built between the 1990s and early 2010s when waterproofing standards were less rigorous.

2. Termite Activity and Timber Pest Damage

Termites cause more damage to Australian properties every year than fire, flood, and storms combined. That’s not an exaggeration — it’s an industry-wide figure that underscores why pest inspections exist as a separate discipline. Inspectors use a combination of visual assessment, tapping (listening for hollow timber), moisture detection, and in some cases thermal imaging or radar devices to identify active colonies and past damage. Termite damage is often concealed within walls and structural timber, invisible from the outside while the structural integrity is being eaten away from the inside. Annual pest inspections are recommended for all homeowners in termite-prone regions, which includes most of mainland Australia.

3. Roof and Gutter Deterioration

The roof is the first line of defence against the elements, and it takes a beating. Broken or displaced tiles, corroded metal sheeting, deteriorated flashings around penetrations and junctions, blocked gutters, and poor drainage are all extremely common. Many of these issues are invisible from ground level — you need someone physically accessing the roof space and examining the exterior. Left unaddressed, roof problems lead directly to water damage, which leads to timber decay, which leads to structural compromise. The cascade effect is real and expensive.

4. Electrical Non-Compliance

Older properties frequently have electrical systems that don’t meet current safety standards. The most common finding is the absence of safety switches (Residual Current Devices or RCDs) on power circuits — mandatory in most states for new installations but not always retrofitted in older homes. Other common electrical findings include old ceramic fuse boxes that need upgrading to modern circuit breakers, deteriorated wiring in roof spaces, overloaded circuits from decades of ad-hoc additions, and aluminium wiring from the 1960s and 70s that requires specialist assessment. Building inspectors perform visual assessments of electrical systems only — for detailed testing and certification, a licensed electrician is required.

5. Cracking and Movement

Cracks appear in almost every property, and the vast majority are cosmetic — hairline cracks caused by normal thermal expansion, minor settling, or the natural drying of materials. The critical distinction is between cosmetic cracking and structural cracking. An experienced inspector can differentiate between the two based on location, width, pattern, and direction. Stair-step cracking in brickwork, horizontal cracking in walls, and cracks wider than 5mm are all flags for potential structural movement. Common causes include reactive soil movement (a huge issue in parts of Melbourne, Adelaide, and western Sydney), inadequate drainage, tree root interference, and foundation deficiency.

6. Subfloor and Ventilation Problems

What’s underneath the house matters as much as what’s above it. Elevated timber-floored homes need adequate subfloor ventilation to prevent moisture buildup, which accelerates timber rot and attracts termites. Inspectors crawl into subfloor spaces (where accessible) to check for deteriorated bearers and joists, blocked ventilation openings, standing water, inadequate support, and evidence of pest activity. In slab-on-ground construction, the focus shifts to drainage around the slab perimeter and signs of slab heave or cracking. Properties where the previous owner has enclosed subfloor areas without maintaining ventilation are a particularly common problem.

How to Read an Inspection Report Without Panicking

Inspection reports can be terrifying for first-time buyers. You receive a 40-page document listing dozens of “defects” and your heart sinks. But context matters enormously. Almost every property — including brand new ones — will have findings. The key is understanding what’s serious and what’s just wear and tear.

Most quality reports categorise findings by severity. Here’s how to interpret the common classifications:

The executive summary at the front of the report is your starting point. It should clearly state whether any safety hazards or major defects were identified. If the summary is clean or only lists minor items, you can breathe easier — then read the detailed sections at your own pace.

If major findings are listed, don’t panic, but do take them seriously. Get the inspector on the phone to discuss what they found, how confident they are in the severity, and what further steps they recommend. Then get quotes from relevant tradespeople before making your next move.

What Happens on Inspection Day

A thorough building inspection for a standard 3–4 bedroom house typically takes 2 to 3 hours on-site. Apartments and units take 1 to 2 hours. Larger, older, or more complex properties can push past 3 hours. Be wary of anyone who claims they can inspect a full house in under 90 minutes — speed and thoroughness don’t usually coexist in this field.

Here’s how the day typically unfolds:

How to Choose an Inspector Who Isn’t Terrible

This is where many buyers go wrong. They Google “building inspector near me,” pick the cheapest quote, and hope for the best. The quality gap between inspectors is enormous — and a bad inspection can be worse than no inspection at all, because it gives you false confidence.

Every state has different licensing requirements, but here’s what to verify regardless of where you’re buying:

Beyond licensing, the three non-negotiable criteria are:

Professional indemnity insurance. This protects you if the inspector misses something significant. Ask them directly — what is your PI cover, and what is the value? If they hesitate, find someone else.

Experience with your property type. A 1920s weatherboard cottage presents completely different challenges to a 2015 townhouse or a 1970s brick veneer. Make sure the inspector has meaningful experience with properties of similar age, construction type, and style to the one you’re buying.

Report quality. Ask for a sample report before booking. You want clear photographs, plain-English explanations, severity ratings for every finding, and specific recommendations — not a generic tick-and-flick checklist. The report is the entire point of the exercise; if it’s vague, it’s useless.

Using Inspection Findings to Negotiate

This is where the inspection pays for itself — literally. If the report identifies major defects, you have documented evidence to support a price adjustment, a request for the vendor to complete repairs before settlement, or a credit at settlement to cover repair costs.

The approach that works best depends on the finding:

For defects with clear repair costs (e.g., a broken hot water system, roof tiles needing replacement, a retaining wall requiring rebuilding), get written quotes from licensed tradespeople and present them with the inspection report. This is a factual, evidence-based negotiation — not an emotional one.

For defects requiring further investigation (e.g., suspected structural cracking, possible waterproofing failure, evidence of past termite activity), request an extension of time to engage a specialist before committing. This is reasonable and most vendors will accommodate it.

For defects that are deal-breakers (e.g., active termite infestation in structural timbers, major foundation failure, extensive non-compliant renovation work), you may choose to renegotiate heavily or walk away entirely. Your solicitor or conveyancer can advise on the mechanics of this under your specific contract terms.

Focus your negotiation on major defects and safety items. Trying to renegotiate based on a list of 30 minor maintenance items will irritate the vendor and weaken your position on the things that actually matter.

Why New Builds Need Inspections Too

There’s a persistent myth that new properties don’t need inspecting because they’re “brand new” and therefore defect-free. The data tells a very different story.

A multi-university study of 346 Australian construction projects found that nearly 19,600 rework events were needed to fix defects over a six-year period, at an average cost of 39% of the original contract value. That is an extraordinary figure. Experienced building inspectors regularly report finding non-compliant work in virtually every new build they inspect — ranging from minor cosmetic issues to serious structural and safety deficiencies.

For new builds, the inspection approach is different. Rather than a single pre-purchase inspection, best practice involves stage inspections at key milestones during construction: the slab stage (before concrete is poured), the frame stage (before internal linings are installed), the lock-up stage, the fixing stage, and a final handover inspection before you accept delivery and make the final payment. Each stage catches problems while they’re still accessible and relatively inexpensive to fix. Once walls are lined and floors are laid, defective framing or plumbing becomes far more costly to rectify.

If you’re buying an already-completed new build or an off-the-plan property that has just reached practical completion, a comprehensive pre-settlement inspection is essential. Document everything, photograph everything, and submit your defect list to the builder in writing before you settle — this is critical for preserving your rights under the statutory warranty period, which varies from 2 to 7 years depending on your state and the type of defect.

When to Walk Away

Walking away from a property you’ve emotionally invested in is hard. But it’s far less painful than discovering $80,000 worth of structural remediation after settlement.

The situations where walking away is usually the right call include active, widespread termite infestation in structural timber (treatment is one cost — repairing the structural damage is another, much larger one), major foundation failure requiring underpinning or restumping across the entire property, extensive non-compliant renovation or building work that would require council approval and significant rectification to bring up to code, evidence of deliberate concealment of defects by the vendor (this also raises legal questions your solicitor should address), and any situation where the estimated repair costs, combined with the purchase price, push the total above what the property is reasonably worth in good condition.

On the other hand, don’t walk away over minor or even moderate issues that have clear, affordable solutions. Every property has wear. Every property has some cracking. Every property over 20 years old probably needs some electrical or plumbing updates. These are negotiating points, not deal-breakers.

Inspections Are One Piece of the Puzzle

A building inspection tells you about the physical condition of a specific property. But it doesn’t tell you whether the suburb is a smart place to invest, whether prices are rising or falling, whether the area has a crime problem, or whether there’s new infrastructure on the way that could transform the neighbourhood.

Smart property decisions require both — understanding the building you’re buying and understanding the market you’re buying into. The inspection report handles the first part. Data-driven suburb research handles the second.