The FBAA has called for APRA to investigate how mortgage valuations are calculated, as it believes home buyers are being disadvantaged.
FBAA chief Peter White
said brokers have reported huge variations in valuations for the same property, sometimes by hundreds of thousands of dollars.
“This is not good enough. Valuations should reflect the true value of a property and incorrect valuations can in some cases prevent buyers from being able to purchase the home they want.”
Lenders often rely on computer-generated market averages, without any physical assessment of the property, says White.
A recent Queensland property purchased through an FBAA broker was given a valuation range of $350-$460K by a bank, however when the same property was assessed by three other online valuation companies, the valuations were $533-$643K, $537-$605K and $617-$695K.
“How can a property of this price range receive valuations that differ $345K between the lowest and highest?” White asked.
White says it’s time for APRA to step in and regulate how property valuations are calculated.
According to the association, ValEx has previously told brokers not to bother disputing low valuations as “only one or two per cent of valuers actually [change] the figure based on a dispute".
“It’s time to review the model used for valuation assessments and allow a more effective dispute procedure,” White said.