fig 2010 - valuation system
TRANSCRIPT
8/8/2019 FIG 2010 - Valuation System
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NSW Valuation SystemMass Appraisal ModelBruce Helman
Acting Chief Valuer
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Purpose of the valuation system
• Provide a base for local council rating and landtax.
• Contribute to the state’s land information system.
• Independently determine compensation followingcompulsory acquisitions of land.
• Provide valuation and property advice togovernment.
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Valuation System Governance
• Based on principles of:
– Independence through separation of roles
• Valuer General, LPMA, external contractors,external review
– Accountability through formal agreementswith documented requirements and
independent review processes – Transparency through open access to
information
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Role of Land & Property
Management Valuation Services• Maintain Register of Land Values
• Provide valuation service delivery to Valuer
General through Service Level Agreement• Provide policy and valuation expertise
• Provide quality assurance to valuations
• Procure and manage contracts• Manage customer service and objection and
appeals reviews
FIG 15 April 2010
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Valuation System Structure
FIG 15 April 2010
NSWGovernment
Legislativeframework
Valuer
GeneralPolicies andStandards
Lands
(LPI)Operations
Service standards inService Level Agreement
Valuation system& advice
Legislation & parliamentaryoversight
Legislation &Ministerial oversight
Advice
Valuation
ContractorsValuationservicesValuation services
in accordance withcontracts
Service definitionin contracts
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Valuation System Roles
FIG 15 April 2010
Valuer General
Statutory responsibilities
Land and Property Information
Operational management of valuation system
Rating and Taxing ValuationsValuation of Land Act 1916
Office ofState
RevenueLand Tax
LocalCouncilsCouncilRates
Acquiring authorities(State and Local Government)
Offer of compensation
authority
Independent valuation contractors
Valuation recommendations
Individual land holders
Delegated
Land and Property Information
Quality assurance and issue of valuations
Determinations of CompensationLands Acquisition (Just Terms
Compensation) Act 1991
Notices ofValuation
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Separation of Roles
• Clear separation of roles
• Increasing separation between LPMA
and contractors
• Contractor responsibility to determine
market and deliver completed and
quality assured values
FIG 15 April 2010
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Resources
• Valuation Services has 140 staff to maintainRegister, manage contracts and provide
quality assurance• 18 Rating & Taxing Contractors servicing 36
rating and taxing contracts
• 3 year contracts with 1 + 1 option
• Provides valuation consultancy services togovernment clients
FIG 15 April 2010
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Basis of Valuations
• Valuation of Land Act 1916 as amended
• Section 6A – market value of land excludingimprovements (site value)
• All valuations made at same date - 1 July of eachyear – available to rating & taxing authorities duringNovember
• Mass appraisal system based on components or submarket groups
• Provision for individual valuations where MAmethodology not appropriate
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Basis of Valuations
• Contractor analyses sufficient salesacross the range of market within a
component• Sample property valued and factor used
to update all in group
• Approx 35000 sales analysed during2009
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Basis of Valuations
• Components based on like properties withlikely similar market movement
• Vary in size from less than 10 to greater than9000
• One benchmark per component
• Reference benchmarks to test values acrossrange
• Requirement set in contract
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Component Quality Assurance
• QRP - The relative measure of variation within the
inter-quartile range.QRP = QRANGE / Median Value x 100
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Land Value Verification
Program• Objective - to improve the valuation data toensure the most accurate application of mass
appraisal methodology• 1.9 million land values individually reviewedsince 1 May 2006
• Challenges in managing balance betweenvaluation quality and timely review
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Review & Approval
• Standards and delivery requirements set outin contract and Procedures Manual
• Valuation Services manages valuationcontracts
• Monitors contractor progress throughoutvaluation program
• Reviews quality at provisional and final
• Approval after meeting delivery qualitystandards
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Quality Assurance
• Contractor values monitored throughout theyear’s program
• Quality assurance by regular program• Audits focus on procedure and process to
ensure that quality outcomes are obtained
• Are formal investigations into valuationprocess or outcomes
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Quality Assurance
• Two types of audit
• Formal program audit from program
• Audit arising from issue identified• Written report containing recommendations
issued to contractor for comment andaction/rectification
• Actions logged and followed up
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Quality Assurance
• Internationally recognised statistical tests
• Coefficient of Dispersal COD measures variation ofvalues
• Mean Variation of Price MVP measures relationshipbetween sale and value
• Price Related Differential PRD measures variationacross the value range
• Variation from price – measures variation betweensale properties and non sale properties
FIG 15 April 2010
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Improvement in Standards
• Percentage of LGA’s meeting Qualitative Statistical Standards
(2004 – 2009)
COD RESIDENTIAL – From 21% to 96.6%BUSINESS - From 31.5% to 94.4%
MVP RESIDENTIAL - From 54.3% to 96.6%
BUSINESS - From 34.85 to 88.8%
PRD RESIDENTIAL - From 32.4% to 84.5%
BUSINESS - From 35.9% to 74.8%
FIG 15 April 2010
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Results of Improve Quality
Assurance• Decreased ministerials
• Decreased correspondence from public
• Increased positive comments from public
• Improved qualitative statistics (2004 to 2009)
- COD: RESIDENTIAL – From 23.8 to 4.6
BUSINESS - From 29 to 6.7
- MVP: RESIDENTIAL - From 87 to 95.6
BUSINESS - From 78 to 92.9- PRD: RESIDENTIAL - From 1.15 to 1.02
BUSINESS - From 1.22 to 1.09
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International Standards
• Statistical standards that are adopted arerecognised internationally
• Australian Property Institute providesstandards documents for Rating & TaxingValuation in Australia/New Zealand
• Valuer General has Land Value Improvement
Committee to determine statistical standardsand methods of imroving quality assurance
FIG 15 April 2010