Online valuations surge as pandemic sets new norm for mortgage industry

The significant increase in valuations processed was partly attributed by the research firm to its automated valuation model (AVM) and desktop valuations helping to reduce mortgage processing times and boosting customer service. 

In property, a valuation refers to the process of determining the exact price or value of the property.  

Compared to onsite valuations (which can take a few days to complete on average), AVMs are processed instantaneously, while desktop valuations need a few hours. 

Use of online valuations is fast becoming an industry norm.  

Figures showed that CoreLogic’s products are now being used in almost half of the valuation requests to banks and lenders, ranging from large financial institutions such as the National Bank of Australia (NAB) to new lenders like 86 400 and non-bank lenders such as Athena. 

In some digitally savvy financial institutions, around 80 per cent of the valuations are processed through CoreLogic’s products, according to the research firm. 

CoreLogic estimated that more than 1 million home buyers and owners have requested for a digital valuation in the past year alone. 

Tim Jenner, CoreLogic’s executive of product, data and analytics, believes that a series of innovations has led to a transformational impact to the industry.

“The valuation is such a critical enabler in the home-buying process. By using property data, analytical techniques and digital workflow tools, we have removed several manual steps from the process and helped lenders and brokers radically reduce the ‘time to yes’ for their customers, even amid these record-high volumes,” he said.

Milena Malev, CoreLogic Asia Pacific’s general manager of financial services and insurance solutions, said consumers are now seeking timeliness and efficiency and had increasingly come to expect a level of digitisation in the mortgage process to reflect everyday online experiences, while experiencing good customer service. 

“Coping with this volume is a fundamental challenge for big lenders, as their legacy systems can limit their ability to easily consume the necessary data. In addition, 60 per cent or more of mortgage volume tends to come from brokers, so lenders are juggling broker expectations while keeping up with changing consumer needs,” Ms Malev said.

Also responding to a significant lift in digital valuations, Andy Kerr, NAB executive, home ownership, said: “We know the confidence provided by fast decisions is critical in reducing stress and supporting our customers [to] get their dream home in the competitive housing market.” 

The banking executive added that they are now focused on making 60-minute unconditional approvals the new normal for the process.