Property analyst Residex reports that a quarter of properties sold recently that had been bought since start of 2005 fetched less than their earlier purchase price! Neutral Bay seems to have copped it worst, with a house median value of $2m selling for an average 12% less than purchase price, so the unlucky owners lost some $275,000 on the property not counting all the other expenses such as taxes, duties, and interest. And Residex CEO John Edwards forecasts the number of people losing money on their houses will increase.
Mr Edwards says a major part of the problem is poor valuations. Usually there are no very similar houses that have sold in the area recently, and valuation has to be based on experience and judgement.
Actually wise estate agents don't claim to "value" properties because they are not qualified valuers. Estate agents offer an opinion only. Legally, valuers are allowed a 15% margin of error.
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