Industry participants generate the bulk of their revenue from the residential real estate market.
Melbourne, Australia (PRWEB) November 10, 2014
Operators in the Real Estate Valuation Services industry in Australia provide independent, unbiased valuations of dwellings or commercial properties. Valuations are performed by trained professionals and have legal standing for the purpose of issuing mortgages, assessing insurance claims and negotiating lease agreements. Real estate appraisals are not included in the industry. According to IBISWorld industry analyst Andrei Ivanov, “appraisals are provided by real estate agents and property advisors and are usually estimates based on market knowledge that are not definitive and have no legal standing.”
Industry participants generate the bulk of their revenue from the residential real estate market. Dwelling transfers, refinancing activity and commencements of new dwellings all require valuation services. Other instances where valuation services may be required involve legal proceedings, such as divorce. “Valuation of commercial real estate generates higher fees due to the greater complexity involved, but this is offset by the lower volumes of commercial work,” says Ivanov. Most valuations are performed on behalf of lending institutions, such as commercial banks. Lending institutions outsource this function to property valuers for a fee. Aggregators, such as Valuation Exchange (ValEx), also provide a channel for smaller industry participants to provide valuations on behalf of a bank. The industry exhibits a low level of market share concentration. Major players include Herron Todd White (Australia) Pty Ltd.
Industry revenue growth has been stagnant over the past five years, largely due to a decline in dwelling transfers in 2010-11 and a drop in new dwelling commencements in 2011-12, both of which were offset by a rising level of refinancing activity over the period. Refinancing activity increased due to historically low interest rates, which provided an incentive for property owners to secure better lending rates. Overall, industry revenue is forecast to decline at an annualised 0.1% over the five years through 2014-15, to $329.7 million. In 2014-15, historically low interest rates will continue to support refinancing activity, with revenue forecast to grow by 7.5%. The outlook for the Real Estate Valuation Services industry remains solid, underpinned by strong fundamentals such as population growth and the resulting demand for housing. To the extent that the number of housing transfers is limited by the annual turnover of residential property stock, industry growth is capped by the overall growth of total housing stock in Australia.
For more information, visit IBISWorld’s Real Estate Valuation Services industry in Australia report page.
Operators in this industry specialise in estimating the fair market value of real estate. Valuers research a property or development to determine the characteristics pertinent to its market value. Valuations for a property are carried out when it is sold, mortgaged, taxed, insured or developed.
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