The IPTI commented that since beginning this process in 2002 the City of Cape Town valuation department had made great progress towards the integration and proficient use of computer modelling to value properties.

The Cape Times previously reported that an independent but small analysis of the city's valuations had found an "unacceptably high" variation from actual sales prices, indicating poor results.

This was according to property valuer Peter Meakin, who analysed a random selection of 420 sales, about half of those made in July, 2009, the city's chosen month for valuations.

He found that on average property prices were overvalued or undervalued by more than 23 percent, double the internationally accepted margin, which states this should not be more than 10 to 15 percent - this measure is called the coefficient of dispersion (COD).

IPTI reported a COD of 13 to 18 percent, much better than Meakin's analysis, but still outside international standards. IPTI noted this was an improvement on 2006.

It said in previous years, contractors carried a majority of the valuation work.

"Over time city staff have been gaining expertise and in 2009 performed many of the data collection, data qualification and valuation analysis functions. In the final analysis the city has completed the revaluation for 2009 to acceptable standards. The valuation department has instituted substantial improvements and for general valuation 2009 achieved good results," IPTI said.

However, it said changes were noted in the commercial valuation methods and processes, and this area remained the one that needed "the most attention".

"Significant improvements in organisation, staffing and technology have been instituted that bode well for future valuations," it said.

The report also noted that in 2007 the lack of "fulsome validation" of sales was a serious shortcoming and should be addressed by regularly screening all sales and maintaining a valid sales database for future purposes.

"A sales questionnaire could be developed to aid in the confirmation process," read the report.

Mayoral committee member for finance Ian Nielson said the city's valuation system had improved substantially since 2006.

"The key message is very simple. General valuations 2009 has been completed to exceptional standards and has achieved good results," he said.

Mayor Dan Plato acknowledged there were problems with implementation.

"I just hope everyone will study this. We were just trying to do good business and we meant good. We don't pick up anything negative in the report. It put all the negative sentiments aside," said Plato.
"Data management continues to improve and be more efficient. The number of properties re-inspected annually increased from an average of 65 000 per year before 2006 to an average of 71 000 per year," says the report.

Cape Times

Posted at 10:13AM Jul 22, 2010 by Editor in Cities and Towns  |  Comments[2]