Valuers must diversify to survive: WBP
Property valuation firms need to diversify into becoming impartial buyer’s advocates to survive, according to Greville Pabst, chief executive of WBP Property Group.
Pabst says there is push among firms to move from valuation into the advisory space to “help consumers select, buy and invest in good investment-grade property”.
“The whole process of buyer and vendor advocacy is a new arena for valuers to play in,” Pabst tells Property Observer
“People still hang on the words of the estate agent, even though they are acting on behalf of the vendor.
“[On the other hand], a valuer’s backing is completely independent,” he says.
WBP has been building up its advice business in 2011 and will look to grow it further in 2012 and over the next five years.
“We see it as quite a dynamic area over the next few years.”
Pabst says he is still astounded that people will buy a $1 million home in the inner suburbs of Melbourne and Sydney without seeking any professional advice yet they would never buyer shares or gold bullion without first seeking financial advice.
“People think because they live in a house they are property experts – most people are not getting advice before they invest,” he says.
“In New York, no one buys without engaging a buyer’s agent first.”
His comments follow WBP’s alliance with Queensland-based firm Herriots.
He forecasts the industry to shrink to just a handful of firms driven by a desire from the major banks to partner with larger, national firms.
“We are generally going to see more consolidation in the future. At the end of the day the Australian market will be controlled by four or five super groups. It’s no different to any other industry, be it accountancy, retail, banking etc,” he says.
“The writing has been on the wall for small firms for some time.”
WBP’s alliance with Herriots will allow it to extend its coverage into Queensland, with the firm already having a strong presence in Victoria, NSW, South Australia and WA.
“Herriot’s has good regional coverage with 10 branches,” he says.
The merger will consolidate WBP’s standing among the top five firms in Australia.
Under the arrangement Herriots will adopt a new name and logo and is known as WBP Herriots QLD from December 1, 2011, with the alliance to provide residential, commercial and specialised property valuations for Australia’s leading mortgage lenders, businesses and thousands of private consumers.
Herriots Property Valuers specialises in both residential and commercial property valuations.
The valuation industry enduring a tough year following moves by the major banks requiring firms to take on more risk in the event of a loan going bad, driving up professional indemnity insurance premiums.
Pabst says this issue has been resolved with the banks looking to forge deeper relationships with the larger valuation firms.
