How will property valuations be affected due to COVID-19?
Full valuations may not be possible under these circumstances due to social distancing measures.
Furthermore, data related to auction clearance rates, comparable sales, etc. would be less freely available and would not reflect actual property prices as there has been a drop in property transactions due to COVID-19
Valuers will try to present the property value that is true and transparent, but it has to be understood that these property reports have been prepared under extraordinary circumstances.
Furthermore, valuation reports may contain comments like:
- Property not fully inspected
- Only external inspection completed
- Virtual inspection completed
These comments are in place to disclose the potential impacts of the coronavirus on how property valuations are conducted.
As valuers will prepare a property valuation report based on the specific date, it will reflect the market conditions of that time.
What property valuation methods will be used?
The Australian Property Institute (API) has outlined alternative valuation techniques like kerbside valuation, desktop valuation, etc. that can be used in place of full valuation, especially when:
- The valuer cannot access the property if the residents are in quarantine and self-isolation due to the pandemic.
- The resident does not allow the valuer to enter his/her property due to the current situation.
- The valuer is not comfortable to enter the property due to health and safety concerns.
Lenders are accepting other forms of valuations like desktop/AVM and kerbside valuations. These valuations do not require access to the property.
The valuer will not enter the property, and will get an external cursory look at the property and the neighbourhood.
Kerbside valuations were only accepted if the LVR was less than 80%. However, banks have revised their valuation policy and a LVR of up to 95% can be considered on a case by case basis.
This valuation is used in tandem with desktop valuation
Desktop and AVM valuations
Again, the valuer does not need access to the property and will provide a valuation report based on property data, recent comparable sales and property listings.
Desktop and AVM valuation will use the latest and accurate information to minimize the risk of valuation uncertainty.
There are some lenders who are accepting desktop valuations for LVR up to 90%. Before the pandemic, the LVR was restricted to only 80%.
The biggest downfall for these valuations is that if significant renovations were done, it is completely ignored in the valuation report.
Furthermore, as these are non-invasive and non-physical valuation methods, the application could be referred to credit for final assessment as lenders do not want to take the risk of valuation uncertainty.
A full valuation must be done in circumstances where the property is located in high density area and the LVR is more than 70%, property floor area is less than 50 square meters and there are postcode restrictions.
For more details, please talk to our mortgage brokers by calling us at 1300 889 743 at or fill in our online enquiry form.
Get a free upfront valuation
Our mortgage brokers have a strong relationship with many of the banks and lenders.
- We can get you free property reports and equip you with the right information so you can accurately work out where you want to buy.
- We can get free bank valuations with lenders who provide a suitable valuation for your property.
- No extra fee charged for these services.
- We maintain a close relationship with over 40 lenders, which consists of major banks and specialist lenders. We know their lending criteria and will ensure that we’ve ticked all the right boxes before submitting your application to the lender.
Our mortgage brokers can help you order a free property valuation with some of our lenders.
Call us on 1300 889 743 or fill in our free assessment form for more information.