BAU Valuation instructions
1. Individual Valuation Types
a. Individual Acquisition, Construction, Sale & Leaseback
DHA requires a Market Valuation that might include either one or both of the below categories:
i) AS IS valuation to include:
a. Capital (Improvement + Land)
b. Rental
c. Replacement
d. If no improvement LAND ONLY
Valuers are required to take into consideration the current amenities.
ii) AS IF valuation to include:
a. Capital (Improvement + Land) AS IF the attached improvement specifications and details, are complete
b. Rental AS IF the attached improvements are complete
c. Replacement
Valuers are required to take into consideration the current amenities for AS IF assessments and are required to take into consideration the attached Specifications List /Floor plans as if all works will be completed and development consent forthcoming without unduly onerous terms and conditions.
b. Individual Disposal
DHA requires an AS IS Market Valuation that includes:
AS IS valuation to include:
a. Capital (Improvement + Land)
b. Replacement
c. If no improvement LAND ONLY
Valuers are required to take into consideration the current amenities.
c. Individual Lease
DHA requires a Market Valuation that might include either one or both of the below:
i) AS IS valuation may include:
a. Capital (Improvement + Land)
b. Rental
c. Rental range
d. Replacement
Valuers are required to take into consideration the current amenities.
ii) AS IF valuation may include:
a. Capital (Improvement + Land) AS IF the attached improvement specifications are complete
b. Rental AS IF the attached improvement specifications are complete
c. Rental Range AS IF the attached improvements are complete
d. Replacement
Valuers are required to take into consideration the current amenities for AS IF assessments and are required to take into consideration the attached Specifications List /Floor plans as if all works will be completed and development consent forthcoming without unduly onerous terms and conditions.
d. Pre-construction
DHA requires an AS IF Market Valuation that includes:
AS IF valuation to include:
a. Capital (Improvement + Land)
b. Rental
c. Replacement
Valuers are required to take into consideration the attached Specifications List /Hypothetical floor plans without unduly onerous terms and conditions AS IF completed.
2. Individual Valuation Instructions (Types A to D)
These specific valuation instructions apply to valuation types A to D as detailed above.
2.1. Considerations/attachments
In relation to the property, the valuation report should provide a commentary on market movement at the time of the valuation. This need only be a short paragraph to offer the requester an insight into market movements.
If the Valuer or the valuation firm has previously undertaken a valuation of the subject property within the past twelve (12) months this must be noted in the report. The historical reported values should be noted and the variance or movement in both the capital and rental values should be reported.
DHA has an expectation that once an inspection is completed that the report be submitted within two (2) working days.
2.2. Valuation report
The valuation report is to include commentary on but not limited to the following:
2.2.1. Property risk assessment
The risk-rating matrix shall include ‘Yes’ / ‘No’ ratings addressing the following attributes:
a. Location and Neighbourhood
b. Land (if applicable)
c. Environmental issues
d. Improvement (if applicable)
e. Recent market direction
f. Market volatility
g. Local economy impact
h. Market segment conditions
Table 2 below provides an example of basis Risk Assessment / Rating Table. The rating will be sliding scale of 1 to 5 where one is no risk and five is high/extreme risk. Anything that is between one and two returns a result of ‘No’. Results of three or above become a ‘Yes’ and the Valuer is required to include further comments about the risk assessment item.These comments are to be provided within the body of the report or within the additional comments section of reports.
Table 2
|
Property risk assessment
* Must comment on any YES Risk Rating
|
| Property risk |
Yes/No |
Market risk |
Yes/No |
| Location |
NO |
Recent Market Direction (Capital / Rental) |
YES |
| Land (incl. planning, title) |
NO |
Market volatility |
NO |
| Environmental issues |
NO |
Local economic impact |
NO |
| Improvements |
YES |
Market segment conditions |
YES |
2.2.2. Valuation methodology
In undertaking the valuation, one or more valuation approaches may be used in order to arrive at the valuation defined by the appropriate basis of value in accordance with the International Valuations Standards (IVS) Framework.
DHA requires the Valuer to provide the following:
a. Full details of rationale adopted for any assumptions used (must be shown in detail) in arriving at a particular value.
b. The valuation methodology used should be clearly specified, such as direct comparison, discounted cash flow, capitalisation of net income, summation etc.
c. Details in using these valuation techniques of GST on materials, supplies and revenues, or the GST liability on the sale of property (where appropriate).
2.2.3. Comparable evidence
The comparable evidence utilised in the valuation report should ideally:
a. Include a minimum of five (5) settled relevant comparables for both sales and rental;
b. Be within six (6) months of the date of valuation;
c. Be within 15% (plus or minus) of the assessed market value;
d. Be of a similar type, location, age, condition, size, etc.;
e. Be listed from lowest to highest sale price;
f. Be listed from lowest to highest rent price;
g. Where possible, provide comparables that fall either side of the subject property i.e. inferior and superior;
h. For new properties that form part of a development incorporating common areas and/or shared facilities (e.g. Strata Title, Community Title, and Plan of Subdivision etc.), a minimum of five (5) settled resales from within the subject group and/or resales external to the development are to be provided.
i. For vacant land and/or new house and land properties situated within a new residential estate a minimum of five (5) settled resales from within the subject subdivision and/or resales external to the subject subdivision are to be provided.
DHA purchased properties are considered Open Market transactions, whereas DHA sales with a lease attached should not be considered.
Rentals where DHA is the Lessor are not to be used for comparison purposes.
Where the minimum requirements for comparable evidence per above is unavailable, the Valuer should provide explanatory comments in (Additional Comments). Note; a minimum of five (5) settled sales and rentals is a mandatory requirement in all instances. Additional ‘agent advised’ or unsettled sales may be relied upon.
Status and reliability of all evidence must be noted.
The Valuer must provide an adequate description of the comparable properties for all comparable evidence utilised and provide pertinent details of the comparables, including its comparability to the subject in accordance with the comparability table supplied below.
For the purposes of this document, the following definitions apply:
a. A settled comparable is a sale whereby title has transferred to the new owner and that transfer of title has been duly registered by the relevant State or Territory authority. It is sufficient for the Valuer to rely upon information provided via industry recognised third party sales databases such as RP Data, Red Square, The List etc., to confirm the details of the transaction.
b. A resale comparable is a sale transaction subsequent to the initial ‘Off The Plan’ or ‘New’ sale by a builder/developer or builder/developers agent.
2.2.4. Agents advice/unsettled sales
a. Agents Advice and/or Unsettled Sales should only be included in addition to the five (5) mandatory settled sales, and must be clearly identified. Additional commentary in respect to these sales, such as their source, may be provided.
b. Reliance upon Agents Advice and/or Unsettled Sales as evidence to support an assessment of market value is at the Valuer’s discretion. However, the instructing party will not accept any assumption that the Agents Advice and/or Unsettled Sales will proceed to settlement at the advised sale price.
c. Agents Advice and/or Unsettled Sales evidence must be clearly identified in the valuation report, but may be recorded in ‘Sales and Rental Evidence’.
2.2.5. Transactions without a Real Estate Agent and/or not at arm’s length sale
Provide comment when the current sale of the subject property has taken place without the intervention of a Real Estate Agent and/or is considered to be a ‘not at arm’s length’ transaction.
2.2.6. Comparability table
Where the direct comparison approach is adopted, the valuer will be required to include comments which address the below comparison attributes for each of their comparable sales/rental within the report.
Table 3
| Detached houses and apartments |
| Living area |
Smaller |
Comparable |
Larger |
| Construction year |
Older |
Comparable |
Newer |
| Location |
Inferior |
Comparable |
Superior |
| Aspect |
Inferior |
Comparable |
Superior |
| Grounds improvements |
Inferior |
Comparable |
Superior |
| Profile/presentation |
Inferior |
Comparable |
Superior |
| Land size |
Smaller |
Comparable |
Larger |
| Additional carports/garages |
Yes |
No |
|
| Overall |
Inferior |
Comparable |
Superior |
Vacant land
|
| Topography |
Steep |
Comparable |
Flat |
| Street level |
Below street level |
Level with street |
Above street level |
| Shape |
Inferior |
Comparable |
Superior |
| Location |
Inferior |
Comparable |
Superior |
| Aspect |
Inferior |
Comparable |
Superior |
| Land size |
Smaller |
Comparable |
Larger |
| Overall |
Inferior |
Comparable |
Superior |
NOTE: Living areas for the subject property must be noted and allocated to the designated areas being Living area, Garage/carport, outdoor areas etc. When available the comparable evidence is to be included on the valuation reports in accordance with IPMS.
2.2.7. Photos
Established Dwellings – The report should include both external and internal photographs by the Valuer at the time of inspection. Photographs are to be date and time stamped. If this function is not available on the camera, the Valuer should provide comments that the photograph was taken at the time of the inspection.
Vacant land – The report should include a minimum of one colour photograph of the vacant land by the Valuer at the time of inspection. Photographs are to be date and time stamped. If this function is not available on the camera, the Valuer should provide comments that the photograph was taken at the time of the inspection.
2.2.8. Vacant residential land
When valuing vacant residential land, the Valuer should:
a. Identify and physically inspect the subject allotment (this means a sufficiently comprehensive inspection of the subject allotment to enable the valuation to be completed in accordance with accepted valuation practice). Normal valuation practice requires the Valuer to identify and inspect the allotment ‘on the ground’, not from inside a vehicle.
b. Note the surrounding area and identify any adverse characteristics that impact the marketability and value.
Where the Valuer cannot identify and physically inspect the subject allotment, do not proceed with the valuation. The valuation instruction should be referred back to the instructing party.
2.2.9. Improvements
General
The Valuer should:
a. Fully inspect all improvements, both internally and externally in line with normal industry practices.
b. If the Valuer is unable to access a habitable area of the improvements, the Valuer should comment on this in the report. However, if the inspection of the restricted area is considered by the Valuer to be critical to the assessment, the valuation instruction should be referred back to the instructing party.
c. List outdoor areas, car parking and storage areas separately.
d. Highlight any additions and/or alterations that are apparent.
e. Highlight any structures or improvements that may not be council approved.
Home Units
The Valuer should:
a. Specify the total number of units within the complex;
b. Describe the unit’s location (including level and aspect) within the development; and
c. Indicate the number of levels in the development.
2.3. Valuation report format
The valuation report is to be a Short Form Report and must comply with API standards.
Where applicable for pre-construction valuations, additional spreadsheets are to be completed and returned in both excel and PDF formats.
2.4. Inspection type
Internal / Kerbside / Desktop Assessment
1. Valuation Types
DHA requires a Market Valuation including ‘Bulk Acquisition Discounted Assessment’ that might include either one or both of the below:
i) AS IS valuation to include:
a. Capital (Improvement + Land)
b. Rental
c. Replacement
Valuers are required to take into consideration the current amenities.
ii) AS IF valuation to include:
a. Capital (Improvement + Land) AS IF the attached improvement specifications and details are complete
b. Rental AS IF the attached improvements are complete
c. Replacement
Valuers are required to take into consideration the current amenities for AS IF assessments and are required to take into consideration the attached Specifications List /Floor plans as if all works will be completed and development consent forthcoming without unduly onerous terms and conditions.
iii) Bulk Acquisition Discounted Assessment
DHA specific Bulk Acquisition Discounted Assessment where DHA are purchasing a specified number of dwellings in one transaction. The methodology in assessing the Bulk Acquisition Discounted Assessment should take into consideration potential discounts passed on from the developer to DHA, and may include the following factors:
a. Agent’s commission
b. marketing costs
c. property class being acquired
d. size of the development
e. number of units being acquired
f. overall supply/demand in the locality
g. development life cycle risk
h. developer motivation
i. buyer profile - (settlement risk)
iv) In One Line Assessment
The In One Line Assessment requires the collective Gross Realisation Value be discounted by the following costs:
a. Stamp Duty on acquisition,
b. Holding charges for the term,
c. Interest Charges for the term,
d. Solicitor and Selling agent expenses
e. Profit and Risk factor
f. Subdivision and other council costs (where applicable)
2. Valuation package
The Valuation Package attached to the Valuation Instructions may contain the following documents:
a. Site Plan
b. Individual Floor Plans including dimensions and elevations
c. Specification lists highlighting both DHA and Developer inclusions for completed dwellings
d. Subdivision Plan
e. Information Memorandum for subject site
3. Valuation report
The valuation report is to include commentary on but not limited to the following:
3.1. Property risk assessment
The risk-rating matrix shall include ‘Yes’ / ‘No’ ratings addressing the following attributes:
a. Location and Neighbourhood
b. Land (if applicable)
c. Environmental issues
d. Improvement (if applicable)
e. Recent market direction
f. Market volatility
g. Local economy impact
h. Market segment conditions
Table 4 below provides an example of basis Risk Assessment / Rating Table. The rating will be sliding scale of 1 to 5 where one is no risk and five is high/extreme risk. Anything that is between one and two returns a result of ‘No’. Results of three or above become a ‘Yes’ and the Valuer is required to include further comments about the risk assessment item.
These comments are to be provided within the body of the report or within the additional comments section of reports.
Table 4
|
Property risk assessment
* Must comment on any YES Risk Rating
|
| Property risk |
Yes/No |
Market risk |
Yes/No |
| Location |
NO |
Recent Market Direction (Capital / Rental) |
YES |
| Land (incl. planning, title) |
NO |
Market volatility |
NO |
| Environmental issues |
NO |
Local economic impact |
NO |
| Improvements |
YES |
Market segment conditions |
YES |
3.2. Summary of the valuation
The valuation should include an executive summary, detailing the essential information contained in the report, such as the valuation figure and conditions and assumptions upon which the valuation is based.
3.3. Location
DHA requires the Valuer to provide the following:
a. A description of the general age and quality of surrounding properties and the status of the locality.
b. Comments on existing and potential uses for the property and its surroundings. Zoning and land use should be confirmed to ensure that current or proposed uses comply with consent conditions. Copy certificates should be supplied.
c. A description of the property's proximity to local facilities, amenities and services.
d. Comments on any general trends within the surrounding area i.e. population growth, traffic flows, transport adequacy, etc.
3.4. Site and title details
DHA requires the Valuer to provide the following:
a. The full address and title reference of the property with comments on the size, shape and dimensions of the land concerned. A fresh title search is to be supplied with the report. The physical characteristics of the land is to be reported.
b. The name of the registered proprietor.
c. The identification and reporting of title encumbrances such as easements, covenants, rights of carriageway and where applicable, their effect on value. Any registered interest on the title must be reported.
d. The identification and reporting of any outstanding statutory orders or the possibility of future orders being imposed.
3.5. Market commentary
In relation to the property, the valuation report should provide commentary on:
a. The existing market and possible future demand for the property. Selling rates and assumptions should be well explained.
b. Advice on the level of current and future competition in the market for the sale of the property.
3.6. Valuation methodology
In undertaking the valuation, one or more valuation approaches may be used in order to arrive at the valuation defined by the appropriate basis of value in accordance with the IVS Framework.
DHA requires the Valuer to provide the following:
a. Full details of rationale adopted for any assumptions used (must be shown in detail) in arriving at a particular value.
b. The valuation methodology used should be clearly specified, such as direct comparison, discounted cash flow, capitalisation of net income, summation etc.
c. Details in using these valuation techniques of GST on materials, supplies and revenues, or the GST liability on the sale of property (where appropriate).
3.7. Comparable evidence
The comparable evidence utilised in the valuation report should ideally:
a. Include a minimum of five (5) settled relevant comparables for both sales and rental;
b. Be within six (6) months of the date of valuation;
c. Be within 15% (plus or minus) of the assessed market value;
d. Be of a similar type, location, age, condition, size, etc.;
e. Be listed from lowest to highest sale price;
f. Be listed from lowest to highest rent price;
g. For new properties that form part of a development incorporating common areas and/or shared facilities (e.g. Strata Title, Community Title, and Plan of Subdivision etc.), a minimum of five (5) settled resales from within the subject group and/or resales external to the development are to be provided.
h. For vacant land and/or new house and land properties situated within a new residential estate a minimum of five (5) settled resales from within the subject subdivision and/or resales external to the subject subdivision are to be provided.
DHA purchased properties are considered Open Market transactions, whereas DHA sales with a lease attached should not be considered.
Rentals where DHA is the Lessor are not to be used for comparison purposes.
Where the minimum requirements for comparable evidence per above is unavailable, the Valuer should provide explanatory comments in (Additional Comments). Note; a minimum of five (5) settled sales and rentals is a mandatory requirement in all instances. Additional ‘agent advised’ or unsettled sales may be relied upon.
Status and reliability of all evidence must be noted.
The Valuer must provide an adequate description of the comparable properties for all comparable evidence utilised and provide pertinent details of the comparables, including its comparability to the subject in accordance with the comparability table supplied below.
For the purposes of this document, the following definitions apply:
a. A settled comparable is a sale whereby title has transferred to the new owner and that transfer of title has been duly registered by the relevant State or Territory authority. It is sufficient for the Valuer to rely upon information provided via industry recognised third party sales databases such as RP Data, Red Square, and The List etc., to confirm the details of the transaction.
b. A resale is considered to be a sale transaction subsequent to the initial ‘Off the Plan’ or ‘New’ sale by a builder/developer or builder/developers agent.
3.8. Agents advice/unsettled sales
a. Agents Advice and/or Unsettled Sales should only be included in addition to the five (5) mandatory settled sales, and must be clearly identified. Additional commentary in respect to these sales, such as their source, may be provided.
b. Reliance upon Agents Advice and/or Unsettled Sales as evidence to support an assessment of market value is at the Valuer’s discretion. However, the instructing party will not accept any assumption that the Agents Advice and/or Unsettled Sales will proceed to settlement at the advised sale price.
c. Agents Advice and/or Unsettled Sales evidence must be clearly identified in the valuation report, but may be recorded in ‘Sales and Rental Evidence’.
3.9. Transactions without a Real Estate Agent and/or not at arm’s length sale
Provide comment when the current sale of the subject property has taken place without the intervention of a Real Estate Agent and/or is considered to be a ‘not at arm’s length’ transaction.
3.10. Comparability table
Where the direct comparison approach is adopted, the valuer will be required to include comments which address the below comparison attributes for each of their comparable sales/ rental within the report.
Table 5
| Detached houses and apartments |
| Living area |
Smaller |
Comparable |
Larger |
| Construction year |
Older |
Comparable |
Newer |
| Location |
Inferior |
Comparable |
Superior |
| Aspect |
Inferior |
Comparable |
Superior |
| Grounds improvements |
Inferior |
Comparable |
Superior |
| Profile/presentation |
Inferior |
Comparable |
Superior |
| Land size |
Smaller |
Comparable |
Larger |
| Additional carports/garages |
Yes |
No |
|
| Overall |
Inferior |
Comparable |
Superior |
Vacant land
|
| Topography |
Steep |
Comparable |
Flat |
| Street level |
Below street level |
Level with street |
Above street level |
| Shape |
Inferior |
Comparable |
Superior |
| Location |
Inferior |
Comparable |
Superior |
| Aspect |
Inferior |
Comparable |
Superior |
| Land size |
Smaller |
Comparable |
Larger |
| Overall |
Inferior |
Comparable |
Superior |
PLEASE NOTE: Living areas for the subject property must be noted and allocated to the designated areas being Living area, Garage/carport, outdoor areas etc. When available the comparable evidence is to be included on the valuation reports in accordance with IPMS.
3.11. Photos
Established Dwellings – The report should include both external and internal photographs by the Valuer at the time of inspection. Photographs are to be date and time stamped. If this function is not available on the camera, the Valuer should provide comments that the photograph was taken at the time of the inspection.
Vacant land – The report should include a minimum of one colour photograph of the vacant land by the Valuer at the time of inspection. Photographs are to be date and time stamped. If this function is not available on the camera, the Valuer should provide comments that the photograph was taken at the time of the inspection.
3.12. Vacant residential land
When valuing vacant residential land, the Valuer should:
a. Identify and physically inspect the subject allotment (this means a sufficiently comprehensive inspection of the subject allotment to enable the valuation to be completed in accordance with accepted valuation practice). Normal valuation practice requires the Valuer to identify and inspect the allotment ‘on the ground’, not from inside a vehicle.
b. Note the surrounding area and identify any adverse characteristics that impact the marketability and value.
Where the Valuer cannot identify and physically inspect the subject allotment, do not proceed with the valuation. The valuation instruction should be referred back to the instructing party.
3.13. Improvements
General
The Valuer should:
a. Fully inspect all improvements, both internally and externally in line with normal industry practices.
b. If the Valuer is unable to access a habitable area of the improvements, the Valuer should comment on this in the report. However, if the inspection of the restricted area is considered by the Valuer to be critical to the assessment, the valuation instruction should be referred back to the instructing party.
c. List outdoor areas, car parking and storage areas separately.
d. Highlight any additions and/or alterations that are apparent.
e. Highlight any structures or improvements that may not be council approved.
Home Units
The Valuer should:
a. Specify the total number of units within the complex;
b. Describe the unit’s location (including level and aspect) within the development; and
c. Indicate the number of levels in the development.
4. Valuation Report Format
The valuation report is to be a Long Form Report and must comply with API standards.
5. Inspection Type
Internal / Kerbside / Desktop Assessment
Bulk Annual Valuation Services
DHA requires appropriately qualified, accredited and experienced valuers to perform annual bulk national residential valuations services in relation to capital and rent valuations for internal reporting and to allow DHA to test for impairment as required by AASB140 and AASB102. Market rents are utilised in contractual arrangements, classifying properties, paying investors and assessing retention of stock.
When Services Provider respond to the Fee Allocation section (Attachment 2.2A), they should include a fee which would be applicable for completing the capital and rent valuation for DHA Owned and DHA Leased properties.
DHA will issue a bulk valuation requests in August and there may be adjustments to the list of properties requiring valuations until it is considered final in October. Thereafter there may be minor adjustments advised.
DHA requires the Service Provider to:
- provide the capital and rent valuation certificate for the property as at the review date (31 December), this certificate will be available for internal reporting purposes only;
- provide on the certificate the replacement value for insurance purposes;
- provide valuations that reflect the anticipated fair market rent as at the 31 December valuation date where the Service Provider assess rents are increasing and the trend will continue between the time when the valuation is submitted to DHA and the actual valuation date;
- consider where seasonal factors over the holiday period or wet season cause temporary local rent movements that do not reflect the medium to long-term rental market, any such factors should be disregarded;
- provide the estimated amount for which the property should rent, as at the relevant date, between a willing lessor and a willing lessee in an arm’s length transaction, wherein the parties had each acted knowledgeably, prudently and without compulsion, having regard to the usual market terms and conditions for leases of similar premises.
- not account for any higher rent which might be paid by a tenant with a special interest, or any lower rent which might be acceptable to a landlord with a special interest;
- give full consideration of any qualitative impacts involving fixtures, fittings, landscaping etc. on the rental value to be taken into account;
- provide valuations that are completed in accordance with the deadline provided and preferably prior to the valuation deadline date;
- provide rent valuations that are to be net of GST; and
- assign the full valuation sum to the building value, with no apportionment to land, for strata title properties.
1.1 Property risk assessment
The risk-rating matrix shall include ‘Yes’ / ‘No’ ratings addressing the following attributes:
- Location and Neighbourhood
- Land (if applicable)
- Environmental issues
- Improvement (if applicable)
- Recent market direction
- Market volatility
- Local economy impact
1.2 Market segment conditions
Table 1 provides an example of basis Risk Assessment / Rating Table. The rating will be sliding scale of 1 to 5 where one is no risk and five is high/extreme risk. Anything that is between one and two returns a result of ‘No’. Results of three or above become a ‘Yes’ and the Valuer is required to include further comments about the risk assessment item.
These comments are to be provided within the body of the report or within the additional comments section of reports.
Table 1
|
Property Risk Assessment
* Must comment on any YES Risk Rating
|
|
Property Risk
|
Yes / No
|
Market Risk
|
Yes / No
|
|
Location
|
NO
|
Recent Market Direction (Capital / Rental)
|
YES
|
|
Land (incl. planning, title)
|
NO
|
Market Volatility
|
NO
|
|
Environmental Issues
|
NO
|
Local Economic Impact
|
NO
|
|
Improvements
|
YES
|
Market Segment Conditions
|
YES
|
1.3 Valuation methodology
In undertaking the valuation, one or more valuation approaches may be used in order to arrive at the valuation defined by the appropriate basis of value in accordance with the IVS Framework.
DHA requires the Valuer to provide the following:
- Full details of rationale adopted for any assumptions used (must be shown in detail) in arriving at a particular value;
- The valuation methodology used should be clearly specified, such as direct comparison, discounted cash flow, capitalisation of net income, summation etc.; and
- Details in using these valuation techniques of GST on materials, supplies and revenues, or the GST liability on the sale of property (where appropriate).
1.4 Comparable evidence
The comparable evidence utilised in the valuation report should ideally:
- Include a minimum of five (5) settled relevant comparables for both sales and rental;
- Be within six (6) months of the date of valuation;
- Be within 15% (plus or minus) of the assessed market value;
- Be of a similar type, location, age, condition, size, etc.;
- Be listed from lowest to highest sale price;
- Be listed from lowest to highest rent price;
- For shared facilities (e.g. Strata Title, Community Title, Plan of Subdivision etc.), a minimum of five (5) settled resales from within the subject group and/or resales external to the development are to be provided.
DHA purchased properties are considered Open Market transactions, whereas DHA sales with a lease attached should not be considered.
Where the minimum requirements for comparable evidence per above is unavailable, the Valuer should provide explanatory comments in ‘Additional Comments’. Note; a minimum of five (5) settled sales and rentals is a mandatory requirement in all instances. Additional ‘agent advised’ or unsettled sales may be relied upon.
Status and reliability of all evidence must be noted.
The Valuer must provide an adequate description of the comparable properties for all comparable evidence utilised and provide pertinent details of the comparables, including its comparability to the subject in accordance with the comparability table supplied below.
For the purposes of this document, the following definitions apply:
- A settled comparable is a sale whereby title has transferred to the new owner and that transfer of title has been duly registered by the relevant State or Territory authority. It is sufficient for the Valuer to rely upon information provided via industry recognised third party sales databases such as RP Data, Red Square, The List etc., to confirm the details of the transaction.
- A resale comparable is a sale transaction subsequent to the initial ‘Off The Plan’ or ‘New’ sale by a builder/developer or builder/developers agent.
1.5 Comparability table
Where the direct comparison approach is adopted, the valuer will be required to include comments which address the below comparison attributes for on each of their comparable sales/ rental within the report.
|
Detached houses and apartments
|
|
Construction year
|
Older
|
Comparable
|
Newer
|
|
Location
|
Inferior
|
Comparable
|
Superior
|
|
Aspect
|
Inferior
|
Comparable
|
Superior
|
|
Grounds improvements
|
Inferior
|
Comparable
|
Superior
|
|
Profile/presentation
|
Inferior
|
Comparable
|
Superior
|
|
Land size
|
Smaller
|
Comparable
|
Larger
|
|
Additional carports/garages
|
Yes
|
No
|
|
|
Overall
|
Inferior
|
Comparable
|
Superior
|
|
Vacant land
|
|
Topography
|
Steep
|
Comparable
|
Flat
|
|
Street level
|
Below street level
|
Level with street
|
Above street level
|
|
Shape
|
Inferior
|
Comparable
|
Superior
|
|
Location
|
Inferior
|
Comparable
|
Superior
|
|
Aspect
|
Inferior
|
Comparable
|
Superior
|
|
Land size
|
Smaller
|
Comparable
|
Larger
|
|
Overall
|
Inferior
|
Comparable
|
Superior
|
Living areas for the subject property must be noted and allocated to the designated areas being Living area, Garage/carport, outdoor areas etc. When available the comparable evidence is to be included on the valuation reports in accordance with IPMS.
1.6 Agents advice/unsettled sales
- Agents Advice and/or Unsettled Sales should only be included in addition to the five (5) mandatory settled sales, and must be clearly identified. Additional commentary in respect to these sales, such as their source, may be provided.
- Reliance upon Agents Advice and/or Unsettled Sales as evidence to support an assessment of market value is at the Valuer’s discretion. However, the instructing party will not accept any assumption that the Agents Advice and/or Unsettled Sales will proceed to settlement at the advised sale price.
- Agents Advice and/or Unsettled Sales evidence must be clearly identified in the valuation report, but may be recorded in ‘Sales and Rental Evidence’.
1.7 Transactions without a real estate agent and/or not at arm's length sale
Provide comment when the current sale of the subject property has taken place without the intervention of a Real Estate Agent and/or is considered to be a ‘not at arm’s length’ transaction.
1.8 Photographs
The report should include both external and internal photographs by the Valuer using the available photos on DHA’s online services.
1.9 Improvements
General
The Valuer should:
- Fully inspect all improvements, both internally and externally in line with normal industry practices;
- Comment the report if the Valuer is unable to access a habitable area of the improvements. However, if the inspection of the restricted area is considered by the Valuer to be critical to the assessment, the valuation instruction should be referred back to the instructing party;
- List outdoor areas, car parking and storage areas separately;
- Highlight any additions and/or alterations that are apparent; and
- Highlight any structures or improvements that may not be council approved.
Home Units
The Valuer should:
- Specify the total number of units within the complex;
- Describe the unit’s location (including level and aspect) within the development; and
- Indicate the number of storeys in the development.
2. Valuation report format
The valuation report is to be a Short Form Report and must comply with API standards.
Additional spreadsheets are to be completed and returned in both excel and PDF formats.
3. Inspection type
Internal / Kerbside / Desktop Assessment
DHA requires appropriately qualified, accredited and experienced valuers to perform bulk national residential valuations services in relation to annual rent valuations to establish market rent for properties of interest to DHA.
DHA requires the Service Providers to provide the service for DHA Leased properties. When Services Providers respond to the Fee Allocation section (Attachment 2.2A), they should include a fee which would be applicable for completing the rent valuation for DHA Leased properties.
DHA will issue a bulk valuation requests in August and there may be adjustments to the list of properties requiring valuations until it is considered final in October. Thereafter there may be minor adjustments advised.
DHA requires the Service Provider to:
- provide rent only valuation certificate for the property as at the review date (31 December), this certificate will be available for the investor;
- provide valuations that reflect the anticipated fair market rent as at the 31 December valuation date where the Service Provider assess rents are increasing and the trend will continue between the time when the valuation is submitted to DHA and the actual valuation date;
- consider where seasonal factors over the holiday period or wet season cause temporary local rent movements that do not reflect the medium to long-term rental market, any such factors should be disregarded;
- provide the estimated amount for which the property should rent, as at the relevant date, between a willing lessor and a willing lessee in an arm’s length transaction, wherein the parties had each acted knowledgeably, prudently and without compulsion, having regard to the usual market terms and conditions for leases of similar premises.
- not account for any higher rent which might be paid by a tenant with a special interest, or any lower rent which might be acceptable to a landlord with a special interest;
- give full consideration of any qualitative impacts involving fixtures, fittings, landscaping etc. on the rental value to be taken into account;
- provide valuations that are completed in accordance with the deadline provided and preferably prior to the valuation deadline date; and
- provide rent valuations that are to be net of GST.
4. Valuation Report
4.1 General
The certificate shall include a comprehensive property description sufficient to satisfy a person reading the valuation that all relevant features of the property have been taken into account.
A list of achieved rentals in comparable properties (including a brief description of each) in support of the valuation ensuring comparisons are comparable (type, age and size of property) and there are a number of balanced superior and inferior comparables.
The certificates must be saved individually by the Property ID provided by DHA, and must be PDF.
4.2 Comparable evidence
The comparable evidence utilised in the valuation report should ideally:
- Include a minimum of five (5) relevant comparables for rent;
- Be within six (6) months of the date of valuation;
- Be within 15% (plus or minus) of the assessed market value;
- Be of a similar type, location, age, condition, size, etc.;
- Be listed from lowest to highest sale price;
- Be listed from lowest to highest rent price;
- For shared facilities (e.g. Strata Title, Community Title, Plan of Subdivision etc.), a minimum of five (5) rentals from within the subject group and/or rentals external to the development are to be provided.
DHA leased properties are considered Open Market transactions, whereas DHA sales with a lease attached should not be considered.
Where the minimum requirements for comparable evidence per above is unavailable, the Valuer should provide explanatory comments in ‘Additional Comments’. Note; a minimum of five (5) rentals is a mandatory requirement in all instances.
Status and reliability of all evidence must be noted.
The Valuer must provide an adequate description of the comparable properties for all comparable evidence utilised and provide pertinent details of the comparables, including its comparability to the subject in accordance with the comparability table supplied below.
4.3 Comparability table
|
Detached houses and apartments
|
|
Living area
|
Smaller
|
Comparable
|
Larger
|
|
Construction year
|
Older
|
Comparable
|
Newer
|
|
Location
|
Inferior
|
Comparable
|
Superior
|
|
Aspect
|
Inferior
|
Comparable
|
Superior
|
|
Grounds improvements
|
Inferior
|
Comparable
|
Superior
|
|
Profile/presentation
|
Inferior
|
Comparable
|
Superior
|
|
Land size
|
Smaller
|
Comparable
|
Larger
|
|
Additional carports/garages
|
Yes
|
No
|
|
|
Overall
|
Inferior
|
Comparable
|
Superior
|
|
Vacant land
|
|
Topography
|
Steep
|
Comparable
|
Flat
|
|
Street level
|
Below street level
|
Level with street
|
Above street level
|
|
Shape
|
Inferior
|
Comparable
|
Superior
|
|
Location
|
Inferior
|
Comparable
|
Superior
|
|
Aspect
|
Inferior
|
Comparable
|
Superior
|
|
Land size
|
Smaller
|
Comparable
|
Larger
|
|
Overall
|
Inferior
|
Comparable
|
Superior
|
Living areas for the subject property must be noted and allocated to the designated areas being Living area, Garage/carport, outdoor areas etc. When available the comparable evidence is to be included on the valuation reports in accordance with IPMS.
4.4 Agents advice
- Agents Advice should only be included in addition to the five (5) mandatory rental properties, and must be clearly identified. Additional commentary in respect to these rentals, such as their source, may be provided.
- Reliance upon Agents Advice as evidence to support an assessment of market rental is at the Valuer’s discretion.
- Agents Advice and/or Unsettled Sales evidence must be clearly identified in the valuation report, but may be recorded in ‘Sales and Rental Evidence’.
4.5 Photographs
The report should include one external photograph using the available photos on DHA’s online services.
4.6 Improvements
General
The Valuer should:
- Fully inspect all improvements, both internally and externally in line with normal industry practices;
- Comment the report if the Valuer is unable to access a habitable area of the improvements. However, if the inspection of the restricted area is considered by the Valuer to be critical to the assessment, the valuation instruction should be referred back to the instructing party;
- List outdoor areas, car parking and storage areas separately;
- Highlight any additions and/or alterations that are apparent; and
- Highlight any structures or improvements that may not be council approved.
Home Units
The Valuer should:
- Specify the total number of units within the complex;
- Describe the unit’s location (including level and aspect) within the development; and
- Indicate the number of storeys in the development.
5. Valuation Report Format
The rental certificate is to be a maximum of two (2) pages and must comply with API standards.
Additional spreadsheets are to be completed and returned in both excel and PDF formats.
6. Inspection Type
Internal / Kerbside / Desktop Assessment