As a property owner, you may wonder how to determine the accurate market value of your property. Fortunately, Malaysia’s property market is relatively mature and well-established, with ample market information and qualified property consultants available, including registered valuers recognised by the Board of Valuers, Appraisers, Estate Agents and Property Managers Malaysia (BOVAEP).
What is Market Value?
In accordance with the Malaysian Valuation Standards, Market Value is defined as:
“Market Value is the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm‘s-length transaction after proper marketing where the parties had each acted knowledgeably, prudently and without compulsion.”
What Documents Are Required for an Accurate Valuation?
Although your appointed valuer will conduct inspections, verifications, and market research, there are limitations to publicly available information. Therefore, providing sufficient and relevant documents is essential to enable the valuer to arrive at an accurate market value.
At Agility Valuers & Property Consultants, the following documents are typically required:
Obtain a Fee Quotation in Advance?
Yes, it is advisable to obtain a quotation from your valuer beforehand to clearly agree on the scope of services and the total valuation fees involved.
Valuation fees in Malaysia are regulated under the BOVAEP Scale of Fees and are generally based on the market value of the property. Additional charges may include disbursements and 8% Sales and Service Tax (SST).
Preparation of the Valuation Report
Upon receiving the necessary documents and formal appointment, the valuer will commence the valuation process. This typically includes:
Preliminary review of the provided documents
Conducting relevant searches, including title search, planning search, survey plan, and location checks
Site inspection (internal inspection is particularly important) of the subject property and its surroundings
Analysis of market evidence and valuation computations
Drafting and finalisation of the valuation report
At Agility Valuers & Property Consultants, we encourage clients to review and comment on the draft valuation report before finalisation. This helps minimise the possibility of overlooking important matters, particularly factors that may affect value.
We also welcome clients’ feedback on our findings to ensure the valuation accurately reflects the subject property and fulfils the intended purpose of valuation.
A sample valuation report can be found in our earlier article, “Valuation Report: Format and Contents”:
https://www.agilitymy.com/insight-en/valuation-report-format-and-contents/
Are Transaction Data Alone Sufficient to Determine Market Value?
Can you rely solely on available transaction data to determine your property value? The answer is certainly no.
Agility Valuers & Property Consultants would like to illustrate this with several recorded property transactions.
Example 1 – Icon City at SS8 Petaling Jaya
Unit 1 – 1795sf, transacted at 446psf
Unit 2 – 745sf, transacted at 510psf
Unit 3 – 1393sf, transacted at 359psf
Unit 4 – 745sf, transacted at 872psf
Unit 5 – 965sf, transacted at 746psf
Observation: Transaction rates ranged from RM359 psf to RM872 psf, representing a variance of approximately 143%.
Example 2 – The Scott Garden Jalan Klang Lama
Unit 1 – 764sf, transacted at 445psf
Unit 2 – 872sf, transacted at 493psf
Unit 3 – 1270sf transacted at 342psf
Unit 4 – 764sf, transacted at 916psf
Unit 5 – 764sf, transacted at 851psf
Observation: Transaction rates ranged from RM342 psf to RM916 psf, representing a variance of approximately 168%.
Before making the necessary valuation adjustments, such significant variances may indicate that some purchasers paid substantially more than others for seemingly comparable properties.
Why Do Such Variations in Pricing Occur?
Several factors may contribute to these discrepancies:
Lack of Market Knowledge by Purchasers
While possible, this is relatively unlikely. Although the property market is not a perfectly competitive market like the stock market, it is still a relatively mature market with established regulations, transparency, and professional advisory services.
Over-Declaration or Under-Declaration of Transaction Prices
This is a more plausible explanation. Certain parties may overstate or understate transaction prices for various reasons, such as:
When transaction data is distorted by such factors, careful interpretation becomes essential before adopting the data for decision-making purposes.
Why Professional Valuer Advice Matters?
Interpreting market evidence requires professional judgement and experience. Property owners are therefore encouraged to engage qualified property consultants to analyse and interpret transaction data appropriately.
At Agility Valuers & Property Consultants, we adopt several measures to ensure reliable valuation services, including:
Frequently Asked Questions (FAQs)
Q: How can I determine the market value of my property?
A: The most reliable way to determine your property’s market value is by engaging a registered valuer. A professional valuation considers various factors such as location, property condition, market evidence, planning factors, tenure, accessibility, and comparable transactions, rather than relying solely on transaction data available online.
Q: What documents are required for a property valuation?
A: Typical documents required include the Sale & Purchase Agreement (SPA), title or strata title, floor plans, tenancy agreement (if applicable), quit rent and assessment receipts, as well as disclosure of any relevant matters affecting the property. Providing complete documentation helps ensure a more accurate valuation and faster turnaround time.
Q: Are online transaction data and property portals sufficient to determine market value?
A: Not entirely. While online transaction data can serve as a useful reference, transaction prices may vary significantly due to differences in unit characteristics, market conditions, special arrangements, or even over-/under-declaration of prices. Professional interpretation and adjustments are therefore necessary before determining the actual market value.
Q: How are valuation fees determined in Malaysia?
A: Valuation fees in Malaysia are regulated under the BOVAEP Scale of Fees and are typically based on the market value of the property. Additional charges may include disbursements and applicable Sales and Service Tax (SST). It is advisable to obtain a fee quotation in advance to clearly understand the scope of services and total costs involved.
Q: Why should I engage a professional valuer instead of estimating the value myself?
A: A professional valuer conducts detailed inspections, market analysis, title and planning searches, and verification of market evidence to ensure the valuation is accurate and reliable. This professional assessment is especially important for purposes such as financing, accounting, litigation, acquisition, disposal, taxation, or investment decision-making.
Please feel free to contact Agility Valuers & Property Consultants should you require any further clarification or assistance regarding valuation matters.
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This blog / insight is based on Agility Valuers & Property Consultants / Agility Research (AVPC)’s current understanding and insights about the related topic in the current property / real estate market context. Agility Valuers & Property Consultants / Agility Research (AVPC) makes no guarantees, representation or warranties of any kind, expressed or implied, regarding the information including but not limited to, warranties of content, accuracy and reliability. Interested parties should undertake their own inquiries as to the accuracy of the information. Agility Valuers & Property Consultants Sdn. Bhd. / Agility Research (AVPC) excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss or damages arising therefrom.
Neither the whole nor any part of our blog or insights may be included in any published document, circular, prospectus or statement, nor published in any way without the prior written approval of Agility Valuers & Property Consultants Sdn. Bhd. / Agility Research (AVPC). We shall not be obligated to update this blog / insight in response to changes in market conditions or the regulatory environment subsequently.
For more information, please contact:
Sr Yap Kian Ann
Tel: 603-9544 2694 Email: yap@agilitymy.com
HP : 6012-378 5811 Website: www.agilitymy.com
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