Table 13 - uploaded by Peter Rossini
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In recent years the use of Hybrid Automated Valuation Models has been widely discussed in the property taxation literature. Such models are now recognised in the IAAO's standard for AVM's. Given recent court decisions in Australia that seem to require valuers to consider sales with improvements when assessing site value in "thin markets", such mode...
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Synopsis
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Citations
... This agrees with Downie and Robson (2008), who found that AVM has an advantage of speed and cost-effectiveness over traditional valuation methods. However, despite AVM being modelled to incorporate the aspect of location in the property values (McCluskey and Borst, 2007) and the statistical analysis and aggregation of relevant property market data to maintain higher levels of accuracy (Rossini, 2006;Gayler, 2015), the absence of property inspection to ascertain the general condition of the property gives valuers an upper hand over AVMs (Gatheru and Nyika, 2015). On the other hand, the study found that the respondents gave a low rating on AVMs ease of usage, which can be attributed to their unwillingness to acquaint themselves with new technologies (Blackledge, 2009). ...
... These observations agree with Allen (2013), who found that many disagreements exist on the accuracy level of AVM. However, Rossini (2006) found that property market data and statistical analysis ensure AVM's higher accuracy. In his study, Mooya (2011) observed that valuers fear being replaced by AVM, hence the support of traditional valuation methods other than AVM. ...
Valuation profession is historically known for being more traditional and extensively uses traditional methods of valuation. Despite this, in the recent past, there have been strides to incorporate automated valuation methods (AVMs) in the valuation profession especially for rating, mortgages and revaluation purposes. This new approach, however, attracted controversy when it was piloted in one of the cities in Malawi. This study sought to explore property valuers’ perceptions on the adoption of AVM in rating valuation against the use of traditional methods of valuation. The researchers used a descriptive study design with qualitative data collection and analysis methods. Semi-structured interview guides were used to collect data on valuers' perceptions on AVM. A total of 20 in-depth interviews were conducted with professional valuers. The valuers were asked how they perceive AVM approach to rating valuation compared to the use of traditional methods of valuation in terms of its accuracy, reliability and easiness. Data was manually analysed using content analysis. The general perception of the valuers towards AVM was mixed. One school of thought gave AVM the benefit of doubt for future incorporation into the profession if modified to suit the local environment. On the other hand, AVM was considered as posing threat to the valuation profession since anyone may be deemed qualified to carry out property valuation. However, the valuers are of the perception that the models will never replace traditional methods of valuation, hence suggestions to incorporate AVM as a supplement to traditional methods of valuation so that the former is used as a verification and auditing tool for the latter.
... Results from the questionnaire show that the problem related to lack of evidence (low transactions) exists in the study area with highest frequency score of five (Table 1). This is aligned with the statement by([1],[2],[6],[10],[13],[14],[15]and[18]) where, the nature of thin market is related to the low transaction volume.Besides that, the assessors always deal with time constrains. Usually, time constrains occur as the data is incomplete, lack of comparables, difficulty in making an analysis (adjustments) and others.Table 2show the result from questionnaire distribution on the implications of thin market and it was transferred to bar chart (Fig. 5). ...
One approach to land valuation, particularly used by accessors, is to base price estimates of target properties on comparable properties that recently sold. These properties are chosen to be close matches of the target unit and their transaction prices are used to predict the market price of the target unit. But the choice of comparables is typically not consistent and transparent. In this study, a systematic analytical procedure for choosing comparables that is easy to implement is developed. A hedonic regression using these comparables is then run and the predicted value of the target unit is the assessed value. One of the advantages of this procedure is that it should be straightforward for assessors and public finance officials to use and understand and easy to explain to residents.
This approach is used to estimate land value as well as market prices (that includes the value of the structure) for single family residential properties using data from Maricopa County Arizona from 2007-2018. The best estimators obtain a median prediction accuracy error of 10% and more than 60% of these predictions have a prediction accuracy error within 10% for later years in the sample. These are within the bounds obtained by Zillow for 666 U.S. counties. Market prices are disaggregated into structure, lot, and neighborhood values. On average, these three components make up approximately 30%, 20%, and 50% of total average price. This provides for a nice “rule of thumb” for decomposing the market average property value into these three components; two of which relate to land value.
Taiwan has a wealth of experience in employing a graded, or split-rate, property tax. It is believed that a graded property tax can increase the capital intensity of improvements to land, and thus improve economic activities. In order to achieve this, land value needs to be extracted from the price of an improved property. Despite the long history of a graded property tax in Taiwan, the accuracy and corresponding equity issues of land valuation have so far received scant attention. This study adopts a linear regression model with data sets of both vacant land and improved property to separate land and structure values. This approach solves the common problem of scarce land sales and the empirical results turn out satisfactorily. The empirical findings suggest that the ratio of land value to total property price varies across property types and age of property. In addition, the current practice is likely to contribute to assessment inequity, and consequently tax inequity. All these observations call for the need to overhaul the present property assessment system.
