There is in fact legal precedent for property valuers (or "surveyors" as they are called in the UK) being held financially liable at common law where they value a property negligently:

–Smith v Eric S. Bush, and Harris v Wyre Forest District Council [1990] 1 AC 831 where a property valuer engaged by a building society valued a property for a mortgage application was found to owe a duty of care to the prospective purchaser of the house despite the fact that it was the building society who arranged for the valuation and not the purchaser.

– The above case was affirmed by the Court of Appeal in Merrett v Babb [2001] EWCA Civ 214, [2001] QB 1174 where both the valuer and his firm were found liable

– The above UK cases were followed by the Victorian Supreme Court of Appeal in Derring Lane Pty Ltd v Fitzgibbon [2007] VSCA 79 where the valuer was again held liable despite the existence of a 'disclaimer' on the valuation.

Of course nothing in law is ever completely straight forward and every case will turn on its merits but generally speaking you can assume that a property valuer owes a duty of care to a prospective property purchaser such that should they act negligently in preparing the valuation and the purchaser subsequently suffers financial loss the purchaser can recover that loss from the valuer and his firm. This duty would normally exists whether the valuer places a disclaimer on the valuation or not.

The real issue is what constitutes negligence in this area.

Hi Andrew thanks for your opinion

The whole notion of long term median price growth, in Australian capital cities being 7% and doubling every 10 years, or if you are a property bull that long term median price growth being 10% and doubling every 7 years,  is a whole lot of CROC! 

Just check out the Sydney market on RP Data here 

• Sydney  – peaked Apr 04 $530K,      Mar 08 at $520K     and     Mar 10 at $590K 

Yes Sydney peaked in April 2004 at $530,000 and the last peak was March 2010 at $590,000. An increase of $60,000 over 6 years.  

What does that tell you?   Approx 10% growth over 6 years, not 10% growth every year..

Would be fair and reasonable to say that the Sydney market has peaked in terms of affordability. The stimulus package pushed things along but stimulus is finished now

Of course there are sub markets within markets ( I assume this is what you are referring to?)

* Sydney – all of Sydney data
* Local Government Areas
* Suburbs
* Areas within suburbs
* Streets within suburbs
* Property with river views
* Property with ocean views
etc

Each submarket will demonstrate different performance over time .

I would say it will be a long time until the median price of property in Australian capital cities is $1 M

It will come down to home owners affordability and average incomes
Couldn't offer an opinion on when this might occur
Just having a bit of fun in previous post

It would be pretty far fetched to think that the Sydney market would sustain 7% growth and double every 10 years?
That in 10 years time the median price for Sydney will be $1M
Dream on……….

cheers

Thanks guys lots of theories here. Good stuff

This article might shed some light on real estate cycles

The great 18 year real estate cycle – where are we know? http://www.australian-real-estate.net.au/investing/2010/11/15/the-great-18-year-real-estate-cycle-where-are-we-know/

The most interesting thing they say is that every 18 years we can expect the culmination of a credit-fueled real estate and ensuing business cycle.  This, of course, doesn’t imply that all recessions are preceded by a real estate cycle. It only says that all real estate cycles have spawned economic downturns.

This knowledge has allowed for some prescient forecasts. The prize in that department goes to Prof. Fred Foldvary who wrote in 1997: “the next major bust, 18 years after the 1990 downturn, will be around 2008, if there is no major interruption such as a global war.”

By Professor Steve H. Hanke  who is a professor of applied economics at the Johns Hopkins University and a senior fellow at the Cato Institute.

Hanke might have some credibility

Perhaps I could offer another point of view

Having observed the buying frenzy in Perth in 2006 as a buyers advocate, valuers approving just about anything and lenders accepting crazy short term growth it provided me with an insiders point of view.

Occasionally when observing the market and observing other sales e.g. the property we were considering, that was purchased for over market price (by another buyer), we would see a valuer provide a bank valuation under the offer price and save the buyers bacon (not our client). The deal would fall through and the property would come back on the market. This was the exception and not the norm.

So the valuer was the deal breaker. They could make or break the deal.

Often the valuer would ask the buyers agent for the sales data and naturally the buyers agent would provide sales data that supported the sale. Alternatively the valuers would often call the selling agent for the sales data and naturally the sales agent would provide sales data that supported the sale. Why would a buyers agent or sales agent provide sales data for lower priced sales and risk losing the sale? Self interest and self preservation are human nature.

Often the valuer was very busy and it was much quicker to get sales data from the buyers agent or sales agent. As time is money. The valuers were often on a schedule and have to do so many valuations in one day. Time is money when they have to do volume (valuations). The churn and burn process.

Valuers set property market prices, not buyers and sellers!
They make or break the deal

I agree $340K is a big first step and the article does not indicate that they have paid off the house yet
Of course they would need to furnish the house, have 1 or 2 vehicles, electronic goods, holiday budget, living expenses etc etc etc

Just that hubbie working 75 hours per week which equates to
7 days per week – 11.5 hr days  – not sustainable for health and relationship over even short term
6 days per week – 12.5 hr days –  too tired to be romantic and have kids, which might be beneficial?
5 days per week – 15 hr days (6am to 9pm) – why be in a relationship?

Now Mattt is working 75 hours per day on a labourers wage – after tax dollars go to normal living expenses and loans above etc
Chloe is working as a hairdressing apprentice and would earn a low wage. 

A good story however I cannot see that house being paid off quickly

Any mortgage brokers on the forum who could crunch the numbers?

Yes only concerned about residential sales data. That is sales that have occured.

After every residential sale the details of that sale including address, sale price and other relevant information is recorded in an electronic database.

Some State Governments provide excellent low cost, easy access online sales data services to the public whilst on the other end of the spectrum other State Governments do not provide residential sales data to the public. 

They only provide sales data direct to real estate agents and valuers, which is a disadvantage to the public, to buyers and to sellers.

Otherwise consumers can purchase sales data from resellers.
 The major players are  Australian Property Monitors (APM), PDS Live, Residex & RP Data . 

They can do what they like with the data

No standards required

cheers

There may be some wisdom here from Jeremy Grantham.

See The Australian Online article " Housing market a time bomb, says investment legend ", says investment legend "

THE Australian and British housing markets are the last two bubbles left in the wake of the financial crisis, and it is only a matter of time before they crash, warns legendary US investor and co-founder of global investment management firm GMO, Jeremy Grantham.

"The price of housing typically trades about 3.5 times of family income and in bubble it goes to 6 or . . . 7.5 (times).
"Australia is having one now. You are at near 7.5 times family income . . . which suggests you are twice the size that you should be."

"Sooner or later, the rates will go up and the game is over."

cheers

This graphical information describing Alt A and ARMS mortgage resets in 2011 and 2012 might inform

Hi Ryan

Thanks

One forum I posted on did not allow any links and so I simply did not post comments

So I take a polite approach to using links and ask permission first. If it is okay as per your comment I will use links when relevant. 

Sometimes I find forum conversation is twoing and frowing of personal opinions. Can be lively, entertaining and great spectator sport..Which is great fun.  At other times I have observed some research and data in comments and I thought wow what an interesting point of view or what great data.

I do not take a moderate approach, or the approach that the market is stagnant, or a bullish approach that the market is going up and booming or a bearish approach, watch out the bust is coming . 

I prefer to take a broad approach and form an opinion after  consulting and conducting research.

cheers