Post Truth and Fake News are current buzz words, particularly with the recent USA presidential election. There is a similar type of issue with property that reflects the emerging trends from changing attitudes with the availability of information technologies.
Online property data and value predictions bring to mind the saying that “information is not knowledge”. Add to these changing attitudes, where available information is believed to be the truth making the “instant experts” more determined to challenge professionals without understanding what they don’t know or how to interpret data rather than relying on its face value.
They are frequently taken as a reliable basis for property decisions and are setting people’s expectations. In some cases they can work, particularly where there are plenty of sales of similar properties and little variation in; location, type of buildings, condition, land size, contour and views.
There can also be changes in the property (deterioration, renovation, new kitchens and bathrooms etc) which are not picked up. Also, many are based on rateable values (RV) that are sometimes too high or too low. In a recent example I valued a property for a client who had received offers between $515,000 and $710,000.
On checking the prediction web sites a figure over $800,000 was indicated. The most likely explanation for the predicted figure was that the building was different to most in the area.
A registered valuer will look beyond the headlines and the “off the cuff” views. Details will be checked, the market researched to establish appropriate evidence that can connect the value of the property to the market. The RV is not reliable, because it is carried out on a mass appraisal basis and may not have been recently inspected and details of the property not recently fully checked. And the RV is only another person’s assessment that may no longer be relevant.
By Max Meyers, Registered Valuer, Wellington