22 Oct 2021

Property valuations up on back of hot market

11:49 am on 22 October 2021

The cost of getting a property valued has soared in the past year.

Rent, housing

Photo: 123rf

According to data from the property research firm CoreLogic the cost of a full market valuation rose by 10 percent a year over the past three years.

It said the average turnaround time for a valuation increased by more than 20 percent in the past 12 months.

Full market valuations are generally requested by banks and paid for by would-be property purchasers.

"Property valuation prices typically rise in line with the increase in property values and market activity," CoreLogic country manager Simone Moors said.

"When home buyers are dealing with a heated housing market, lengthy waits and higher costs add to what is for many already an expensive and anxious time."

Moors said it did not have to be like this, urging the New Zealand property market to adopt digital valuation tools that were popular across the Tasman.

"Consumers are seeking timeliness and efficiency, and have increasingly come to expect a level of digitisation in the mortgage process to reflect everyday online experiences.

"By using property data, analytical techniques and digital workflow tools we have removed several manual steps from the process, with a view to helping lenders and brokers reduce the 'time to yes' for their customers, even amidst unprecedented market conditions."

CoreLogic head of product Tim Coad said a full market valuation tended to cost about $1000 compared with as little as $25 for an automated valuation.

The property research firm had its own digital tools, which it said were designed to reduce bottlenecks that were often created when determining if a property is suitable for a borrower and an acceptable level of security for a lender.

It made use of a variety of available data and machine learning technology to quickly determine if a mortgage could be written on a property or if an in-person valuation was necessary.

Coad said the tool was accurate, and it had performed well in tests against the sale prices that actually occurred.

SBS bank had integrated CoreLogic's valuation tool into its operations, which it said had helped to streamline the approval process.

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