I discussed the question of property valuations with Edwin Almeida, our property market insider.
An important question, especially in a falling market – how is fair value to be discovered?
Next time we will look at the future of the estate agency industry as the market slows….
https://www.ribbonproperty.com.au/
I’ve got two questions about the impact of valuation changes these are:
1. Impact on capital adequacy calculation.
Will lower valuations drive the need for the banks to raise more capital? If so it explains the bail in talk recently. The banks and regulators would have to either trigger a bail in or the banks agree to resize their loan businesses to comply, of course they could grab a chuck of super but I doubt it would go down well.
2.Impact under RMBS agreements/offerings.
The banks securitised products and the attached rating agencies, one would assume, would be regularly reviewing the “quality” of the loan portfolio, so a drop in valuations would trigger some sort of response I would think?
Appreciate some informed opinions.
Cheers