Property Valuation

Plain-English definition. A property valuation is a formal written assessment of a property's market value by a qualified valuer, used by lenders to verify that the security underpinning a mortgage is worth what the borrower has agreed to pay.

How it works in Australia. Valuers must be registered under each state's regime and members typically belong to the Australian Property Institute (API), holding "Certified Practising Valuer" (CPV) status. Banks order valuations through panel firms (CoreLogic RP Data, Opteon, LMW, Herron Todd White). Three main types: a desktop valuation ($0–$50, used for low-LVR refinances), a kerbside valuation ($100–$200), and a full inspection valuation ($300–$600). For purchases above $1.5m or unusual properties, lenders almost always require a full inspection. Valuers sign liability-bearing reports — they will systematically come in conservative, often 5–10% below contract price.

Concrete example. You exchange contracts on a Melbourne house at $1.1m. The bank orders a full inspection valuation. The valuer reviews three comparable sales from the past six months — $1.05m, $1.08m, $1.12m — and assesses your property at $1.05m. Your 80% LVR loan was sized at $880,000 against a $1.1m price; with valuation at $1.05m, that's now 83.8% LVR, triggering ~$8,000 of LMI or requiring you to find $40,000 more deposit.

Common confusion. Buyers think the bank valuation should match the price. It often doesn't — valuers value on comparable sales, not on what the buyer agreed to pay. A "low val" doesn't mean you overpaid; it can simply mean recent comps lag the market.