even if you want to buy....the banks wont let you!!
Sales fall over in Brisbane property market as valuations drop
Valuations come in below contract prices Banks erring to the side of caution Deals collapsing on valuations
SELLERS who manage to snare a buyer in Brisbane's soft property market are seeing their deals fall over as a new trend emerges of valuations coming in below contract prices, making it difficult to obtain finance. Place research analyst Lachlan Walker said it was a problem that had been building since the start of the year and his agency had experienced several deals collapsing as a result.
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He believed valuers feared liability from banks if they did not get valuations right, so were erring on the side of caution.
But leading valuer Iain Herriot has dismissed those claims.
He does not think it is as widespread as some agents are claiming and said the variance in valuations was often because owners and buyers don't have full knowledge of the market.
"Owner's estimates of their property's actual value are often wildly optimistic," he said.
Mr Herriot said it was a common misconception that if a seller was asking a certain price and that was what a buyer was prepared to pay that that was what the property valuation would come in at.
He said valuations were determined on other recent sales evidence.
When Paris Hannan and her husband John put an offer on a home in Bulimba in June the valuation came back at the same price as they were offering to buy it for.
The sale depended on selling their existing home and some months later, with that done, they applied for a loan, but the new valuation come in 20 per cent below what they were offering for the house.
Mrs Hannan said she did not believe that within a few months, values had dropped 20 per cent in the suburb.
She is concerned valuers are taking distressed sales into account.
"It did upset me because I thought I already had a valuation done a short time ago and usually banks will let it run over six months," she said.
They are now trying other banks and for another valuation.
Mrs Hannan does not believe the property sale price was unrealistic.
"We think we are getting quite a good deal," she said.
Mr Herriot said the issue had arisen more in off-the-plan sales where people had bought sometime ago when values were at a better level and now they were not worth as much when it came time to settle.
He valued a property recently on the southside of Brisbane which the buyers and sellers had at $650,000 but he valued at $575,000.
Diana Howes of Resolution Research said valuers were definitely taking a very risk-averse approach and some were relying on irrelevant historical data to value new properties.
"I know of one unit, valued by two different firms which came in $80,000 apart," she said.
