Mr Zissler said his members will also back any plans for a Royal Commission into the banking industry.........
'Bullying' banks to force valuers out of business
Apr 27 2016
Duncan Hughes
"Bullying" banks are "intimidating' valuers to accept below-cost fees that are driving them out of business, according to the Australian Property Institute chief executive Mike Zissler.
Big four banks are using cartel tactics to push down valuers' fees for valuing residential properties by 25 per cent to levels last charged in 1980 when the median house price was about $56,000 and Malcolm Fraser was prime minister, Mr Zissler claims.
"We cannot speak out openly with the banks without implied threats and withdrawal of contracts as a punishment. The short-sightedness of the banks and some firms is staggering," he said.
The API has asked the Australian Competition and Consumer Commission to investigate and has raised concerns with the Australian Securities and Investments Commission.
Mr Zissler said his members will also back any plans for a Royal Commission into the banking industry. Valuers claim they are "aghast" at the tactics being used by Big Four banks to cut prices at a "very difficult" time for the industry, he said.
API represents about 8000 members and 650 businesses, ranging from sole practitioners to large companies employing hundreds, and as a profession has an annual turnover of about $300 million.
House buyers need independent valuations of a property before a bank will approve a loan.
Mr Zissler said individual valuers will be forced to increase the number of valuations they conduct each day from about 6 to 10 a day because fees have been reduced from $200 to $150 per valuation, raising quality risks for companies, banks and purchasers.
It is also forcing many valuers to close down or merge, he added. "We are seeing significant changes within the industry that are not in the best interests of the banks and financiers, the valuation profession and the community as a whole," he said.
"We need a reset in which banks and valuers can come into a room and be pragmatic about what is happening. Why is there so much distrust and enmity between the parties and why is it that members of the API cannot speak openly with the banks without implied threats and withdrawal of contracts as a punishment for speaking out."
He added that valuers are being pitted against each over pricing to force rates back to 1980 levels. "Most companies would need to cut their margins to sub-cost pricing in order to be competitive in a tender process.
Companies will be forced out of business which will inevitably lead to a monopoly lead to a monopoly and potential market failure." Banks have been invited to comment