The Valuer-Lender Relationship in Prestige Property

We talk about independent valuation a lot in this industry. But it's rare to hear a lender explain, clearly and candidly, exactly why it matters and what happens when it goes wrong. In Episode 4 of Opteon's Prestige Property Insights Series, that's precisely the conversation we had.

The valuation does more work than most people think

In a standard bank loan, the property valuation is one of two key inputs. The bank wants to know the asset's value and the borrower's ability to service the debt. If the valuation is reasonable, the loan proceeds. The valuation matters but it's not carrying the full load.

In more complex lending structures, the picture changes. When a lender's fee is tied to a share of the property's upside calculated as a proportion of the loan against the property's opening value, the valuation isn't just a gateway to borrowing. It directly determines what the loan costs the borrower over its life.

That's a meaningful distinction. And it's one that Richard Young, co-founder of specialist non-bank lender Midkey and our Episode 4 guest, makes clearly: the independence, accuracy and integrity of the valuation is foundational to his entire model.

"The fundamental independence of the valuer in arriving at what is the value of that property is highly relevant in these times of dynamic shifts in the market."

— Richard Young, Co-founder, Midkey

Why consistency matters as much as accuracy

One of the more revealing details from our conversation was how Midkey approaches the valuation at both ends of a loan, on entry, when the loan is established, and on exit, when it's refinanced or repaid.

The approach is deliberate: use the same valuation firm, and ideally the same individual valuer, for both. Not because it guarantees a higher number at exit, but because it guarantees consistency. The valuer who was perhaps conservative on the way in will apply the same rigour on the way out and that even-handedness is what makes the process fair to the borrower.

It's a detail that speaks to something we believe strongly at Opteon: a good valuation relationship isn't a one-off transaction. It's built over time, through repeated engagement and a deep understanding of the asset and the market it sits in.

"It's not only on the way in. It's on the way out. And that's all about fairness and independence."

— Richard Young, Co-founder, Midkey

When the number doesn't match expectations

No valuation conversation is complete without acknowledging the harder moments — when a valuation comes in below what a borrower expected, and the gap between market evidence and personal belief is difficult to bridge.

Richard shared a recent example involving a prestige property in Double Bay. The valuation came in below the borrower's expectations. Rather than leaving the outcome at the written report, we sat down together, Opteon and Midkey's senior leadership  and walked through the methodology. The comparable sales. The reasoning. The approach behind the adopted value.

"Even though we didn't quite get to the outcome that you wanted, it did end up in a good customer experience because we took the time to explain," Richard said.

The outcome didn't change. But the experience did. And in a lending relationship where the borrower is the one paying for the valuation, not the financial institution, that distinction matters.

"There's an art and a science to valuation. The more thought that goes into that, the better — for everyone."

— Richard Young, Co-founder, Midkey

Communication is part of the service

It's easy to think of a valuation as a document. A number on a page, supported by evidence, delivered and done. But in prestige property, where transactions are infrequent, assets are unique, and the gap between a borrower's sense of value and market evidence can be significant, the written report is rarely the whole story.

What Richard is describing, and what the Double Bay example illustrates, is that communication is a core part of what makes a valuation valuable. Explaining the methodology. Being present when a client has questions. Being willing to sit across from a lender and walk through the reasoning, even when the outcome is uncomfortable.

That's the kind of relationship we're working to build at Opteon, not just with Midkey, but across the lenders and advisors we work with at the top end of the market. Because in prestige property, the stakes are high enough that the valuation conversation rarely ends at the report.

What this means for the industry

Richard is candid about where he sees this heading. As non-traditional lending models grow and as more borrowers look for ways to access equity without the constraints of conventional debt,  the demand for independent, credible valuations will grow with them.

That's not just an opportunity for valuation firms. It's a responsibility. The more weight that a valuation carries in a lending decision, the more important it is that the process behind it is rigorous, transparent and independently arrived at.

In a market that's as nuanced, selective and high-stakes as prestige property, that has always been true. What's changing is that more people in the lending world are starting to recognise it.

About the participants

Gabriel Carreno is Director – Residential Prestige NSW at Opteon, specialising in high-value residential valuations across Sydney and key prestige markets nationally.

Richard Young is co-founder of Midkey, an ASIC-regulated non-bank lender providing equity access solutions for Australian homeowners. Richard spent 25 years in investment banking in Hong Kong and China, including 17 years at Macquarie Capital. 

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Episode 5 | Market Outlook & Series Close