Four things every Property Valuer needs to know
The valuation industry has had a challenging 12 months, but it appears that a much overdue correction is happening to the property market right now and there are four trending things every Property Valuer needs to know.
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The valuation industry has had a challenging 12 months, from a Banking Royal Commission to one of the biggest downturns since the 1980’s. In Melbourne alone, there was no increase in the median house price in 17 consecutive months (December 2017 to June 2019).
Valuers have also been impacted by a host of geopolitical factors at play, such as Brexit and Trump’s trade wars, ultimately stifling international and domestic confidence. This has taken a huge hit on housing valuations, transactions and in turn making valuation volumes much lower than previous years.
But, things are changing…
It appears that a much overdue correction is happening to the property market right now and The Search People believes there are four trending things you need to know. Read on to find out more!
1. Interest rates are at record low
0.75 per cent – RBA Governor, Phillip Lowe, took the unprecedented step to take Australia’s Official Cash Rate below 1%, for the first time in the history of The Reserve Bank. The full effect of this has not been felt yet and sceptics wonder whether it ever will, with the big banks not passing on the full cut. What is inarguable is that it has never been cheaper to borrow money and lower interest rates have a direct impact on the number of new mortgages and housing transactions.
2. APRA serviceability changes
7 per cent – In May, the Australian Prudential Regulation Authority (APRA) revised the minimum serviceability requirements of loans from 7 per cent of total borrowings, to a 2.5 per cent interest rate buffer. The 7 per cent serviceability requirement was a great policy when it was introduced in December 2014 and the Cash Rate was 2.5 per cent. Since then, it has dropped 175 basis points and many industry experts saw the policy as needlessly preventing serviceable loans.
3. Cyber Security
It might be the sexiest word in the technology industry right now. What was once a necessary evil tasked to one poor soul in the IT department, is now being discussed in every board room in Australia. The valuation industry is not immune to this, when more and more services are moving online, we must be serious about our cyber security responsibilities.
4. Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has concluded
From December 2017 the front page of every paper had a bank on it, never before has the Australian public been so infatuated with the banking industry. Pending any further inappropriate banking conduct, the news cycle has well and truly moved on. While the Royal Commission will stay in the minds of all financial institutions for some time, the average reader has simply moved on. This will certainly have an impact on consumer trust in banking.
It’s clear that the winds are changing in the valuation industry, and valuers are headed for a busy period.
If you want to see how The Search People can help your valuation team leverage these opportunities, with market leading service, security and prices contact us today on 1300 298 111.