Powered by MOMENTUM MEDIA
the adviser logo
Growth

New valuation rules scrapped after industry ‘kerfuffle’

by James Mitchell5 minute read

The Australian Property Institute has withdrawn its recently introduced standing instructions for off-the-plan property valuations following “unintended consequences” and an industry “kerfuffle”.

On 28 September the API alerted its members about the new standing instructions for residential valuations, which insisted that all valuers must physically visit and identify a site.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

At the time the API confirmed that its decision to introduce the new rules was made in consultation with lenders, mortgage insurers, valuers and property groups.

The Adviser reported on the matter on 9 October after Queensland mortgage broker Xavier Quenon, from Go Mortgage Corporation, expressed his shock that the new guidelines had been dropped on the industry “like a bombshell”. A number of Mr Quenon’s mortgage deals were effectively left in limbo after he was told the properties could not be valued under the new rules.

Advertisement
Advertisement

However, the API confirmed yesterday that new rules have now been withdrawn.

Speaking to The Adviser, API chief executive Mike Zissler explained that “there was a kerfuffle” once the new guidelines were introduced.

“We put the guidelines out and they were largely consulted [on] with the industry,” Mr Zissler said. “However, there was a kerfuffle. So we withdrew them and we are reviewing them. There were some unintended consequences, and I believe they were overstated, but we did agree that we will be having a look at those.”

Mr Zissler said that, prior to the API’s decision to withdraw the new guidelines, there had been a broad agreement with lenders that it is critical for valuers to actually visit the site for those properties that are off-the-plan.

“That was agreed, but obviously it did have some unintended consequences and we have withdrawn it but we are looking at it again,” he said. “It has just reverted for the moment but we will come out with a statement at a later date.”

Mr Quenon said that when he first heard the new rules had been introduced he knew they would create havoc.

“I reached out to people in the industry, other brokers and a few developers, and they had heard nothing about it,” Mr Quenon said. “It was never going to be productive, particularly when the banking system required pre-sales.”

Following The Adviser’s report last month, Mr Quenon started to field calls from worried developers.

“I have had heaps of calls from builders, developers and other people I deal with who were worried about having to change the whole development process,” he said, adding that the new rules created blockages in his broking business that are yet to be relieved.

“I’ve still got thirteen contracts on my desk that are in limbo, waiting for the day that we can value the land.”

The API is expected to provide a statement in due course.

[Related: New valuation rules 'dropped like a bombshell']

New valuation rules scrapped after industry ‘kerfuffle’
house plan  x
TheAdviser logo
house plan  x

James Mitchell

James Mitchell

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

Glen Lees

Connective announces record settlement figures

Mortgage aggregator Connective has revealed that its brokers settled a record $95.5 billion across its residential,...

READ MORE
charles grover outfund ta zgvq5o

New SME lender launches into broker channel

A new fintech lender, Outfund, is ramping up for growth through the broker channel after having completed a capital...

READ MORE
david bailey afg ta l8ozkr

AFG’s bottom line hit by Volt closure

The ASX-listed company, Australian Finance Group Ltd (ASX: AFG) has confirmed it is set to deliver “strong...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more