Old figures to blame for wonky values

By Darren Goodsir and Bonnie Malkin October 5, 2005 (NSW) The State's property valuers are using outdated sales data to make land calculations and there was "insufficient time and resources" to check their determinations, the Ombudsman's report has concluded. The eight private firms instructed by the Valuer General's Office to assess properties in the 152 local government areas were charging as little as $1.77 per valuation and their analysis was often threadbare and cursory. The "contestable contract" system, introduced in 1996, had reduced the cost of performing valuations in real terms. But the Ombudsman, Bruce Barbour, said "the productivity savings arising from the deployment of reduced resources has started to impact on the quality of valuations …" This "may have reached the point where the costs cannot be driven down further without seriously undermining the methodology." Poor valuations had been arrived at because of a gap between the time sales data were received and when calculations were made. In a sample of 44 districts, the Ombudsman found 44 per cent of sales figures were between two and six months old and 25 per cent were six to 12 months old. Staff had no training in statistical anomalies or in the potential effect of data fluctuations, and this had compounded the errors. The report upheld the integrity of the Valuer General's complaints handling process, which it said was "far more thorough than many people believed". "However, there is still room to make it more transparent, consistent and accountable," the report said. Mr Barbour said the Valuer General failed to give property owners the most relevant comparable sales used to value their property unless requested. "It is unacceptable that the Valuer General failed to analyse objection trends and outcomes as his own 'health check' of the valuation system and had not implemented standard objection procedures to guide decision making," he said. The Sydney lawyer whose complaints prompted the Ombudsman's inquiry, David Singer, said the report uncovered such abuses of the system that it demanded a judicial inquiry. He said the "unholy mess" would continue to cause political disquiet. "This is only the beginning of the huge abuse of proper conduct in the valuation office in this State," he said, adding that the Government would come under pressure to drop the 1.7 per cent tax on land value or risk being accused of gouging. Philip Jenkyn was one of more than 20,000 property owners who contested the valuation they were given in 2003. Mr Jenkyn's three-bedroom house in Hunters Hill was considered to be worth $950,000, even though it was heritage-listed and could not be extended or extensively renovated. "The Valuer General valued the property that I own plus some adjoining properties without taking into account the fact that they were heritage-listed properties," Mr Jenkyn said. "I wrote a letter to the Valuer General saying they should have taken that into account and they had the typical response: get lost." The Land and Environment Court eventually ruled that the Valuer General should take into account the heritage aspect of the house. An independent valuation said the property was worth $650,000, a figure the Valuer General accepted. http://www.smh.com.au/news/national/old-figures-to-blame-for-wonky-values/2005/10/04/1128191720175.html#top