RISK RATINGS - PROPRO
VALUE NEXT 2 3 YRS
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
rating cannot be expected to reflect information that was not common
knowledge, or conditions, events or circumstances that occur
subsequently or unexpectedly.
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.
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".
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
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).
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.
aspect reflects the extent to which the condition(s) of the market
segment is impacting or may impact adversely on the property.
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).