Building Subsidence: What is it and how does it impact property value?

Posted by Brad Porteus on 11 February 2015

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Subsidence can affect property value, it can affect your insurance rates, and it can involve a lot of risk when it comes to purchasing a home.

What is Subsidence?

Generally defined, subsidence is when an area of land begins to compress or sink into the ground. When it comes to real estate, if the sinking area of ground is also part of the ground that supports a building or a home (the foundation), it can cause extensive structural damage to the building.

Subsidence can be caused when a home is built on certain materials, or an area with plenty of moisture in the ground, and that moisture is somehow removed. If the water level drops for any reason, and the house is near a plant that requires a lot of moisture, like a large tree, or built on a material like clay or sand, the ground can contract, resulting in subsidence. This issue is of particular importance here in Perth and wider Western Australia where much of the earth is made up of sand.

Excess water from a leak, flood, or excessive precipitation can also wash away the ground near the foundation of a building, which is another form of subsidence.

What is Underpinning?

When an additional foundation is laid underground to provide additional support to a building, it is called underpinning.

Underpinning can help to prevent or rectify subsidence, but it is always better to catch the problem as soon as possible. Underpinning can prevent a foundation from moving further than it has, but it can also be expensive and time consuming.

Not every building that has been affected by subsidence will need underpinning.

What Issues Can Subsidence Cause?

The main issue that can be caused by subsidence is damage to the foundation. As the foundation of a home is damaged, it can cause cracks in both the interior and exterior of the building walls, whether it’s in the exterior brick or the interior drywall. If your foundation has been impacted, you may notice the following signs in your home.

  • Cracks around doors or windows
  • Large wall, ceiling and floor cracks.
  • Difficulty opening doors or windows for no apparent reason

While some settling and cracks are normal, the ones that may indicate subsidence are usually deeper, diagonal, and appear at weak spots in the structure of your home. They may tend to appear when the weather is especially dry.

How does subsidence affect property value?

If subsidence has affected your home to the point that it needs to be repaired, underpinned, or is no longer safe to live in, the value of your home can decrease. However, in most cases, it does not get to that point.

The big issue when it comes to a home that suffers from subsidence is in insurance costs. If you try to sell your home, the cost of a new buyer insuring the home may mean that buyers are limited.

You may have options (other than lowering the cost of your home) when you’re trying to sell. For example, if subsidence was caused by a large tree or another plant - remove it. Proof that subsidence is no longer an issue for your home can also give you more options when it comes to insuring it.

Should you buy a home with subsidence history?

Generally speaking, if you find a home with a history of subsidence, it’s important to find out what caused subsidence, and whether it has been remedied. You’ll also need to discuss the cost of insuring the home with an insurance professional.

You may ask a building inspector, like us here at BSP Construction Consultants, to come to the home, evaluate the subsidence issue and determine whether the cost works with your budget. A home that has suffered subsidence or even one that has gone through underpinning is not necessarily a bad deal. However, make sure that you are not purchasing a home that is going to cost so much in insurance and repairs that you can’t afford it. In this case it’s best to have this covered in your pre-purchase building inspection.