Banks bully valuers to accept below-cost fees: Australia Property Institute

The Australian Property Institute has called for the establishment of a Royal Commission into banking. 

API Chief Executive Mike Zissler said he is seeing significant changes within the industry which are not in the best interests of the banks and financiers, the valuation profession and the community as a whole.

According to him industry must change if the valuation profession is to continue to remain an independent, objective and authoritative provider of valuation services to the Australian banking and financing industry. 

“We need a reset in which banks and valuers can come into a room and be pragmatic about what is happening," he said.

“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?

“My members are more than unhappy and feel trapped. They must be able to speak with the lenders, whom they contract with, without fear of reprisal. 

“Companies have been pitted off against each other over pricing, and prices have been forced back to 1980’s rates. Yet so much more work and prescription is now required. Many 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 and potential market failure. Moreover, some of the firms that have taken on the new work simply won’t have the capacity to service it particularly in areas they don’t have a presence,” he said. 

“As the CEO of a members-based organisation it greatly concerns me that my members are intimidated by the banking industry, which apparently has failed to recognise the harm it is doing in the long run to itself, the industry and the community.”