Frequently asked COVID-19 questions #7| How are property values being affected?
So whilst we’re not entirely qualified to answer questions regarding valuations of property, we do see valuations as a part of the lending process being returned.
Valuations will still be completed by independent valuers so in most circumstances the valuer has no affiliation with the actual bank. They’re an independent company.
So the way they valuate properties is based on comparable sales in the area. So that process hasn’t changed. We haven’t yet seen a massive impact on the values of properties.
However its really an unknown.
We have heard in Sydney (and New South Wales) and Victoria definately, we’ve heard some valuations coming back more conservative, and I guess that will happen more in the higher end of the market moreso than the more median price bracket in the market.
So it is happening, but we do believe that the impact has been quite minimal at this stage. The other thing that’s happening is valuers are unable to actually enter peoples properties to have a look inside, so just be mindful that if access is restricted as a part of the COVID-19 measures, then they may convert your valuation from a full internal valuation to what we call a ‘curbside’ valuation, where they basically drive by, have a look at the property, then they’ll go online, and extract as much about your property as they can.
The problem with that is if you’ve not really done a lot of aesthetic work on the outside of your property but on the inside you’ve put anew kitchen in, a new bathroom in, there’s a repaint, new carpet etc, then they can’t see those things.
So if you have purchased the property, then done significant work to it, your valuation may be affected.
The best thing we can do in that case is provide as much information to the valuer before he or she doe their valuation. And that could come in the way of if you’ve put a new kitchen in and you’ve got a builder and a contract, plans or anything like that, you can submit that with your valuation, and say this work has been completed.
And also if you can just list the things you’ve done, whether its just repainting, recarpeting, putting a deck off the back those kind of things.
Photos are going to be really integral as well. So the more things we can give the valet to enable them to do a accurate evalution the better.