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The Real Estate Buyer’s Agents Association of Australia (REBAA) has voiced concern over increasing discrepancies between agreed sale prices and valuations on residential property.
According to REBAA president Byron Rose many valuers are pre-empting anticipated interest rate hikes in their current valuations, causing agreed sales to fall through.
A similar trend occurred just prior to the beginning of the global financial crisis in 2008 when interest rates peaked, he said.
“We aren’t buying two or three months down the track, we’re buying in today’s market and properties should be valued in line with what is occurring at the time of purchase,” Mr Rose said.
“Undervaluing properties creates a situation where sellers have to drop prices to match valuations or where buyers have to make up the shortfall if the contract has gone unconditional, leaving them with little room to manoeuvre.
Mr Rose said the inconsistency of valuations was neither fair nor ethical for the buyer.
“At a time like there where there is a large degree of market uncertainty buyers need help not more conflicting advice from those operating within the property market.”
Valuation is defined as the evidence-based process of assessing the value of a property provided by a qualified professional.