Price vs Value – Part Two

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Sr Khaidzir A Rasip is a Chartered Valuation Surveyor by profession with over 29 years of working experience in the United Kingdom and Malaysia. He is a Fellow of both the Royal Institution of Surveyors Malaysia (RISM) and the Royal Institution of Chartered Surveyors (RICS), United Kingdom; and a member of the Association of Valuers, Property Managers, Estate Agents & Property Consultants in the Private Sector (PEPS). A Senior Vice President at Iskandar Regional Development Authority (IRDA) which he joined in 2009, Sr Khaidzir has been assigned to various positions in Social Development, Flagship Development, Economics & Investment, Strategic Communications and now, Urban Observatory divisions whilst maintaining a specific role as the subject matter expert in property for Iskandar Malaysia.

The Royal Institution of Surveyors Malaysia (RISM) explains that valuers are not just from the private sector. There are equally significant number of valuers in the public sector with the majority of them in the Valuation and Property Services Department (JPPH). Self-governance of the profession cohesively by the two sectors ensures that valuation is not motivated by profits but instead, as a bastion to uphold and protect the interest of the public at large. NAPIC or the National Property Information Centre, which issues the quarterly and annual Property Market Report, is also under JPPH as is INSPEN, the National Valuation Institute, which is responsible over research and development. Therefore, in practice, valuation is not only part and parcel of the business and commercial world but is also an important element in our nation building and economic prosperity.

As professionals, valuers are licensed and governed by the Board of Valuers, Appraisers and Estate Agents of the government that will take stern actions on any valuers that breach professional codes of conduct or ethics. Even professional fees charged to the public are being regulated and monitored by the Board. As such, valuers are on par with other professionals such as surveyors, engineers, lawyers and doctors in terms of professional integrity. Malaysian valuers also belong to a global fraternity of appraisers, evaluators and valuers who constantly network and collaborate on formulating and reviewing international standards of governing valuation practices that valuers around the world have to adhere to.

It’s the professional view of RISM that the current state of the property market where prices have risen beyond what is affordable to the masses can be attributed to the primary market where selling prices are being continuously increased, in order to create an impression of price appreciation. This is a marketing tool to attract more purchasers, including repeat buyers and investment clubs. Unlike the secondary market, there is no requirement by the banks to have an independent valuation carried out by a valuer to verify the reasonability of the price before a loan is approved. In fact, the escalation of property prices in the primary market led to an upward pressure on the values of secondary properties where the valuer has to base his/her valuation on market evidence that keep on recording higher values.

Valuers cannot and do not just pluck figures from thin air at their whims and fancies. In fact, RISM is of the opinion that it will be in the best interest of the public if valuers are appointed to verify the values involved in any property transaction be it in the primary or secondary market, under all given circumstances. Valuers can be the very solution, and the check and balance required towards ensuring the property market will remain sustainable, equitable and inclusive to all strata of society.
An edited version of this article appeared in the July/August 2016 edition of Homefinder Malaysia.