Do Valuations Assist Residential Property Investors Prior to Purchase - An Industry Perspective

Publisher:
Royal Institution of Chartered Surveyors
Publication Type:
Conference Proceeding
Citation:
2015, pp. n.p. - n.p. (12)
Issue Date:
2015-07-01
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This paper examines whether the use of valuation advice would assist residential property investors determine the value of property prior to purchase, in contrast to valuations being sought by lenders after the purchase price of property has been agreed upon. Residential property investment has become an asset of choice following the Global Financial Crisis increasing forming part of Australians superannuation. With investor participation increasing, in determining how money is invested for retirement, the quality of advice and the role of that advice in determining the price paid for residential investment property through the use of valuation advice is the focus of this paper. The objective of this paper is to examine whether the use of valuation advice would assist residential property investors determine the value of property prior to purchase. This is in contrast to valuations being sought by lenders after the purchase price of property has been agreed upon. In undertaking this study the views of several professions involved in the property purchase and investment process have been obtained through the use of surveys and semi-structured interviews. The results of the surveys have been analysed using SPSS to assess the level of agreement within an across each of the professions surveyed. The paper finds that direct residential property investment has increased as an asset in the investment portfolios of retirees. The primary finding shows that valuations undertaken by investors prior to purchase is an important step in the property investment process and is supported by each profession with the exception of one. Further, it defines the importance of financial literacy and the need for a regulatory framework governing the investment advice process and the importance the valuation advice plays in the property purchase process.
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