PETALING JAYA (Sept 9): The Valuation and Property Services Department (JPPH) is urging property owners who are dissatisfied with their valuation results to send their appeals to Petaling Land Office to have their appeals recorded.
“The appeal will then be chanelled to JPPH and we will review the valuation. The result of the review will be communicated to Petaling Land Office and a notice will be sent to the appellant,”JPPH deputy director general (Technical) Rahah Ismail (pictured) told TheEdgeProperty via email.
She noted that public can also channel their questions to JPPH via the department’s website : www.jppph.gov.my.
For members of the public who are keen to get the transaction information, data can be purchased from JPPH offices, or they could refer to the Property Market Report produced by the department in its website.
Rahah was replying to the queries of some bungalow owners over the disparity of valuation results between private and government valuers.
TheEdgeProperty.com reported a few days ago that some residential bungalow owners along Jalan Gasing in Petaling Jaya have expressed their dissatisfaction over JPPH’s valuation of their properties which were far higher than the valuation results given by private valuers.
The land price for their properties based on JPPH’s valuation was indicated as RM4,500 per sq m (about RM418 per sq ft), while the private valuer’s result was about RM3,300 psm (about RM306.70 psf), a price difference of 26.7%.
The higher valuation price means a higher cost for the owners when they convert their properties from residential title to limited commercial.
According to Rahah, the disparity in the valuations conducted by private valuers and JPPH is due to the adoption of different valuation basis.
“For instance, some owners might want to take up a bank loan to finance the cost of conversion premium. For loan purposes, banks insist that the valuation is to be based on the use stated in the land title.
“Since the land is not converted and is still under a residential title, the private valuer has to value on this basis. This is also in line with bank risk management practice and prudent lending,” said Rahah.
As for the government, its valuers adopt the market approach, which relies on market evidence — recorded transaction price and rental value — to evaluate the value of the properties.
“Since the valuation is carried out based on the date requested by the Land Office, the value therefore reflects the market as at the valuation date,” she added.
“Our observation was that the purpose of valuation report [private valuer] was for management purpose and the sales evidence used to support the valuation were sales of unconverted residential land zoned for limited commercial in the area,” said Rahah.
The basis of valuation relates to purpose of valuation, and for the properties which have not converted to commercial title, the private valuers will not make any adjustments to the sales evidence to reflect the new approved use.
However, JPPH’s valuation is based on the adjustments on sales of residential land with limited commercial potential.
On the valuation results, Rahah noted that residential land along Jalan Gasing and Jalan Universiti with potential for limited commercial was transacted during 2015 to 2016 at RM3,400 psm to RM4,600 psm, depending on the location.
“Based on recorded sale transactions, the selling price of commercial land in that area was at RM6,000 psm for leasehold. Thus, the value of a converted land to limited commercial would be higher than RM3,300 psm but lower than RM6,000 psm,” she explained.
Based on JPPH’s calculation, the difference between commercial and limited commercial is about 30%.
“Our valuation quoted at RM4,500 psm (RM418 psf) is 27% above residential land value and 25% below the commercial land value,” she said.
Meanwhile, she emphasised that the valuation for conversion premium is clearly stipulated in the Selangor Land Rules to be the market value of the approved use. Any other figure would mean contravening the law.