Bank's property evaluation

Hi guys, is it normal for banks to have a lower evaluation than market value? I called over the phone to major banks and asked about a property value in the N.T. and they all came back with a lower evaluation than market prices listed in property agents and the actual asking price. Are banks being conservative or people on the street (including myself) being too optimistic?

Buying anything right now is tricky if you can wait do so as Patrick is correct above. Let the owners, agents and banker sweat it out (less the bankers).


Your valuation will be dependent on a number of things now but most important is if there is an established transaction history in and establish development to work with. As these are now on a downward trend you should look for at least a 5-10 lower final sell price than current transactions and hope these transaction are recent.


Again, buying right I would not recommend unless the ducks line up and the owner needs to sell and you can carry the property for the next 2-3 years positive which means you can cover the cost of the mortgage given a 2.0 full percent above current during this period and factor in some fairly strong inflation numbers.


I don't believe there are many deals out there like this but you never know as circumstances during a bear market bring many challenged people to the front.

Hi I m not buying it for investment purposes. I need a temporary accommodation for about 3 years and the average rent in the area that I want is about 6K. So instead of wasting approx. 216K on rent, I thought I should buy even if I cant make a profit when I come to sell it, I save some on the rent. What do you guys think?

Don't forget about the transaction costs (agents fees, stamp duty, renovation fees, management fees, rates etc)

Thanks for all the advice. Walkup2, you are spot on the price and yes it is under 1.5 m. It is well managed and fenced complex in the N.T. so I can still get a 90% from major banks. The valuation gap is about 100K roughly so considering all the cost mentioned by sxc, I can still just about to make it. May be I hve been watching too much "Trading Up" these days and hv been dreaming to turn it into a nice and cozy apartment for myself and my daughter as a temp. place to live. The most attractive thing is its balcony - facing a fountain and big enough to put a table for four and a good place to do your lanudry.