Valuation professionals needed in real estate market

Ramani Kangaraarachchi

A well established real estate market must have valuation professionals and recognized standards and practices which helps in ensuring a transparent and efficient market, Singapore National University Professor and Real Estate Department Head Yu Shi-Ming said.

Speaking on “Role and Reliability of Valuation and its Impact on the Financial and Real property Markets” at the knowledge sharing conference at Central Bank Centre for Banking Studies.

He said valuation facilitates the functioning of the real estate market and it is required for different purposes and often mandated by legislation.

Prof Yu Shi-Ming said the definition of market value according to the International Valuation Standards Committee is the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

He said advice of valuers is used for real estate decision-making and many investments are decided by non-property professionals based upon a market value. Besides that valuers advise on property tax, land acquisition and diminution value. It also facilitates the functioning of the real estate market and supports the transaction activities.

He said valuation standards and practices should include maintenance of minimum standards,ensuring uniform practices, highlight important valuation principles, inform valuers of clients requirements and inform and educate clients and users of valuation reports.

Referring to future challenges he said globalization of real estate investment is the main challenge. Deregulation and liberalization of financial services, competition from allied disciplines such as financial consultants, information explosion and new technology plus techniques are other challenges.