WBP Property Group chief executive Greville Pabst says property valuers make easy scapegoats in a soft property market but says the vast majority do a good job and are only “interpreting the market”.
Pabst says it is very easy to blame someone when your home is valued less than what you believe it is worth because people form emotional attachments but says valuers “do not set the market”.
“Valuers are the obvious people to blame,” he tells Property Observer.
“But property values have fallen – we are only the messengers.”
Pabst says good valuers base their valuations on a plethora of historical sales data (sales on the same street, the street behind, in the suburb, etc) and by taking into account the features and characteristics of the individual property.
“Our job is to compare apples with apples and then discount for the bruises,” he says.
Pabst says valuations often come in under buyers' expectations with house-and-land packages bought on the fringes of the city as well as off-the-plan apartments, when contracts are exchanged sometimes two years ahead of settlement.
“You might have bought off the plan 18 months ago. It’s a package. You are buying the land, which has been discounted to reduce the stamp duty while the building costs have been maximised so the buyer can take advantage of the maximum rate of depreciation. Plus there is the developer’s profit and risk factored into the price, the marketing cost and in some cases elevated commissions.
“All this is factored into the price, but that is not the real value.
“Price is what you pay – value is what your get.”