This Risk Rating is an indication of the level of risk of this property reducing in value over the next 2 3 years. It is a forward looking summary rating taking into account aspects affecting, or likely to affect, the value of the property. The assessment is made on the basis of information that is common knowledge and/or readily ascertainable in the market and having regard to reasonably foreseeable events as at the date of the assessment.

The rating cannot be expected to reflect information that was not common knowledge, or conditions, events or circumstances that occur subsequently or unexpectedly.


This aspect reflects the risk of the market changing direction rapidly and having a significant adverse impact on the value of the property. While this will reflect historical performance, reasonably foreseeable events should also be taken into account if they are likely to change the pattern of volatility.

EXAMPLE: An area has tended to experience moderate "boom   bust" cycles. It may warrant a Risk Rating of 4 if the next "bust" could happen in the next 2 3 years (which must be explained in the Comments section). The more severe the likely bust could be and the sooner it might occur, the higher the risk rating. Prospects of an imminent, sharp and severe bust could be a "5".


This aspect reflects the extent to which a significant change in the local economy is impacting adversely and/or the risk that it may impact adversely on the value of the property in the 2 3 year time frame.

EXAMPLE: In a small town, there may be the prospect of a major business or industry closure or downsizing, though it has not been confirmed or happened yet. A Risk Rating of 4 may be warranted at this stage (which must be explained in the Comments section).

Lenders and related third parties should note that the global economy impact on the Australian market generally is not addressed unless it specifically impacts on the particular local economy. A market with significant foreign investment could warrant a higher rating and comment if conditions overseas meant foreign investors were starting or likely to sell out or withdraw interest in the market.


This aspect reflects the extent to which the condition(s) of the market segment is impacting or may impact adversely on the property.

EXAMPLE: The market for inner city medium quality residential units may currently be strong, however a significant over supply is emerging. A Risk Rating of 4 or even 5 may be appropriate (which must be explained in the Comments section).

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