Property Valuation for Bank Lending

Most people encounter property valuations when they need one for their bank. Whether you're buying your first home, refinancing, or taking out equity, here's how bank lending valuations work in New Zealand.

Why banks require valuations

When a bank lends money secured against property, they need to know the property's market value. This determines how much they'll lend. The valuation protects both the bank and the borrower — if the property is worth less than the purchase price, the bank won't lend the full amount, which prevents the borrower from overpaying.

Banks use the loan-to-value ratio (LVR) to manage risk. If a bank's maximum LVR is 80%, and the property is valued at $1,000,000, they'll lend up to $800,000. The Reserve Bank of New Zealand sets LVR restrictions that all banks must follow.

Panel valuers

Banks maintain panels of approved valuation firms. Only valuations from panel-approved firms are accepted. This isn't optional — if you commission a valuation from a non-panel firm, your bank won't use it and you'll need to pay for another one.

Seagars is on the approved panel of every major New Zealand bank: ANZ, BNZ, Westpac, ASB, and Kiwibank. We also cover most non-bank lenders and credit unions.

How to order a bank valuation

You have two options:

1. Order through your bank — your bank or mortgage broker orders the valuation on your behalf. The bank selects the valuer from their panel. You pay the fee, but the report goes to the bank first.
2. Order directly from the valuer — you contact the valuation firm directly, specify that it's for bank lending, and nominate your bank. The valuer submits the report to your bank and sends you a copy. This gives you more control over timing and valuer selection.

Either way, the valuation report is addressed to the bank and follows the bank's reporting format and requirements.

What the bank gets

A bank lending valuation report includes:

• Market value assessment
• Property description and photographs
• Legal description and title details
• Zoning and compliance information
• Risk assessment — weathertightness, contamination, natural hazards
• Comparable sales evidence
• Insurance information
• Any conditions or qualifications on the valuation

When a valuation is required

Banks typically require a registered valuation for:

• Purchasing a property with a high LVR (above 80%)
• Refinancing or switching banks
• Releasing equity from an existing property
• Lending against apartments, especially in the CBD
• Commercial and investment property lending
• Construction lending (pre and post completion)
• Any property the bank considers higher risk

For lower-risk residential lending (under 80% LVR, standard house, established suburb), banks may use an automated valuation model (AVM) or a desktop assessment instead of a full registered valuation. Your bank or broker will tell you which is required.

How long is a bank valuation valid?

Most banks require the valuation to be less than 90 days old at the time of lending. Some banks are stricter — 60 days in a volatile market. If your transaction is delayed beyond this window, you may need a revaluation or an update letter from the valuer.

What if the valuation comes in low?

If the valuation is below the purchase price, the bank will lend based on the lower figure. This means you'll need a larger deposit or will need to renegotiate the purchase price. It's not uncommon — it happens more often in heated markets where buyers are bidding above market value.

If you believe the valuation is incorrect, you can discuss it with the valuer and provide additional information. You can also request a second opinion from another panel valuer, though you'll need to pay for it.