The FBAA is urging APRA to investigate how mortgage valuations are calculated, arguing that buyers are being disadvantaged by valuations that are too low.
FBAA chief executive Peter White said brokers across the country 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,” he said.
Mr White said that, increasingly, lenders were using valuations based on computer-generated market averages although this fails to take into consideration the individual property.
“In the majority of cases, no one is physically visiting the property any more, so valuations are being provided site-unseen,” he said.
“Every property is different in so many ways, which is why individual assessment will always be more accurate than a formula.”
A recent Queensland property purchased through an FBAA broker was given a valuation range of $350,000-$460,000 by a bank; however, when the same property was assessed by three other online valuation companies, the valuations were $533,000-$643,000, $537,000-$605,000 and $617,000-$695,000.
Mr White questioned how a property of this price range could receive valuations that differ by $345,000.
He said it was time for the banking regulator to step in, and that the FBAA would be requesting this directly.
In a separate announcement yesterday, Mr White claimed the association plays a significant role in its lobbying efforts and ongoing discussions with government.
“I believe the FBAA is the industry’s key point of contact with government,” he said.