CBRE targets banks with new home valuation service

The world's largest commercial real estate firm, CB Richard Ellis (CBRE), has launched a national 'Residential Valuation and Advisory Service' in New Zealand in an effort to improve the standards of residential property valuations. Overly optimistic valuations in a falling market have burnt some banks and have been used in fraudulent mortgage deals often referred to as 'hydraulicking'. In Australia banks often require their own approved valuers to provide a valuation for a home loan, whereas in New Zealand banks have often accepted a valuation provided by a valuer chosen by the home buyer. The move to set up a new valuations service is set to add extra competition to the New Zealand property valuation market and is aimed at giving major lenders, such as banks, highly qualified, independent advice on residential property valuations. "Standards (in New Zealand), I believe, are not what they should be," CBRE National Director Patrick Ryan told interest.co.nz. CBRE thinks that in the future, banks in New Zealand will want to handle the valuation process for residential property more than they do now. "The major banks have been very supportive with the feedback being that there is significant demand for a highly credible valuation firm which can offer local expertise backed by a global platform," he said. The current volatility in the market was expected to drive increased demand from banks and consumers for quality residential valuation services, Ryan said. "Some banks and insurers have some issues with some valuers at present," he said. "We have good relationships with the banks, and strict quality control requirements." The new valuation service is based on CBRE's Australian valuation model. "In Australia, a number of major lenders have a panel of valuers who they use (for property valuations)," he said. Ryan said that CBRE was the first national valuation firm to provide a dedicated residential valuations business (in New Zealand), in response to client demand for timely, accountable residential valuations. "The systems we have established in Australia in recent years will allow us to provide as good - if not quicker - valuation turnarounds than our competitors. Our technology platform will allow us to provide a high level of compliance by registered valuers, which will ensure our clients receive independent, professional advice, which will be accepted by all the major NZ lenders," he said. Meanwhile, CBRE also said that it was unlikely that there would be any spring pickup in the residential market, given that this traditionally busy period of the year will mean even more listings on the market, competing for a limited pool of purchasers. "Vendors who had been holding back were expected to release pent up supply to the market but without the same level of willing buyers. Market activity would continue to be restrained in line with interest rates, which were tipped to remain at or around current levels until 2009, notwithstanding the recent and likely further decrease in the OCR by the end of this year," the CBRE Auckland Residential Market report for August 2008 said. CBRE is looking to extend its residential valuation services into all major metropolitan areas in New Zealand within the next two to three years. CBRE has 45 commercial valuers in five offices around New Zealand.