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In a statement yesterday, CoreLogic RP Data general manager of operations, Michael Hooper, defended the group’s valuations service following recent calls for an APRA investigation into the service.
On Monday, FBAA chief executive Peter White issued a statement urging the prudential regulator to investigate property valuations.
Mr White slammed ValEx, claiming that the group has previously told brokers not to dispute low valuations.
“APRA needs to investigate the Valuation Exchange (ValEx), as well as the arrangements between valuers and banks and how the data is calculated,” he said.
“ValEx has previously told brokers not to bother disputing low valuations as ‘only one or two per cent of valuers actually (change) the figure based on a dispute’.
“It’s time to review the model used for valuation assessments and allow a more effective dispute procedure.”
Responding to these claims, Mr Hooper said: “It is disappointing industry bodies such as the FBAA do not properly inform themselves before making such inaccurate statements in a media release.”
Mr Hooper stressed that ValEx does not undertake valuations, nor does it interfere with valuation outcomes.
“ValEx is a workflow system that enables end-to-end management of the valuation process,” he said.
Mr White claimed that 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.
“How can a property of this price range receive valuations that differ [by] $345,000 from the lowest and highest?” Mr White asked.
He said it was time for the banking regulator to step in, and that the FBAA would be requesting that directly.
However, ValEx hit back with the following facts:
When we compare Assessed Market Value V’s Contract of Sale we can report that 90 per cent of residential valuations come within + / - 10 per cent
When we compare Assessed Market Value V’s Owners Estimated Market Value we can report that 69 per cent of residential valuations come within + / - 10 per cent
When we compare Assessed Market Value to Owners Estimated Market Value and compare to Valuation variances we can report valuation firm assessments are within one per cent of each other. In other words there are no significant variations between valuation firms
Disputes data – we can report out of 90,000 valuation requests order in a month, only 2.4 per cent of these actually receive value queries (a lender or broker disputing a valuation outcome). Of this 2.4 per cent only 26 per cent are altered in value (or less than 1 per cent total volume)
“This data is aggregated data derived from our valuation platforms,” CoreLogic RP Data’s Mr Hooper said.
“We acknowledge that at an individual property level there has always been, and there will always continue to be, valuations that do not meet the needs or interests of all stakeholders to support a loan application,” he said.
“However, based on the aggregated data set out above, it is clear that there is no underlying systemic issue.”