Property Valuation in South Australia Assignment

Assignment Task

Introduction

South Australia operates a Purchaser/Provider Model for the provision of values under the Valuation of Land Act 1971 with the Valuer General being the purchaser of assessments from the provider, Land Services SA. In this assignment, you have two tasks, one as the provider and one as the auditor.

Part

1 (Provider Task) - Model calibration, testing, and application.

You are tasked with creating two models in regard to the 2024 Capital Value assessments for all improved residential properties in Morphett Vale. You have been provided with an Excel sheet with a set of transactions for all properties from Jan 1, 2022, to December 10, 2023, and shown in the Sales Data Tab.

In professional practice, acting as the provider you would create Capital Value estimates for all properties with a valuation date of January 1, 2024, but you would be required to send your valuations to the purchaser by December 10, 2023, to enable them to audit the assessment prior to the release on April 1st, 2024. For this assignment you do not need to apply the model to ALL properties, but just the sample of properties provided on the Sample Assessments Tab.

Step

1: Data familiarisation and cleaning. The data provided are directly from the SA Govt Sales History File and you will already be familiar with this format. It would help if you familiarise yourself with the data and then clean the data to remove any obviously non-market transactions or those that will not be useful in your modeling. You must report the systematic procedure(s) you used to remove these sales.

2: Model Estimation. You must estimate (and calibrate) two models using the transaction data that you feel is appropriate. This will involve estimating an indexation model from the previous CV and a hedonic model using whatever variables you feel are appropriate – but NOT the previous CV. You only need to build a basic hedonic model using 4 to 6 variables including at least 1 dummy variable and briefly (and correctly) summarise each. Your Excel workbook should include the models and data used to create them. If you remove further sales from your analysis, you need to specifically state the reason for removing each. The Rubric shows what steps you should take to get

3: Quality test the assessments knowing that the purchaser will audit the values once they receive them to a set of criteria that were provided to you in the client letter. Remember this needs to be delivered by December 10th, 2023. In other words, so you cannot use any transaction data that occurs after that date.

4: Apply your two models to the sample of properties provided. Calculate the proposed 2024 CV for both models making sure the proposed values are rounded to the nearest one thousand dollars and apply a 5% reduction factor to allow for statutory adjustments. Your assessments should be included in the Excel sheet with commentary in the report. Show the assessments side by side for comparison and comment in the report where the assessments vary greatly from each other and from the existing CV.

You need to provide the purchaser (Valuer General) with an Excel Workbook and summary in the form of a short report. This should include:

• An Excel Sheet/s showing the models created. You can add comments on the models to this sheet.
• An Excel Sheet/s showing any quality control testing that you have done, together with comments.
• An Excel Sheet showing the sample properties together with the new CVs.
• A short report outlining the outcomes (not the process) from your work and recommend the best model.

You will now take the role of the purchaser and audit the assessments that have been provided. The provider will supply a summary of the IAAO ratio studies (you did that as part 1 when you took the role as the provider) but you now need to test this independently using a holdout sample.

• Check the quality of the proposed assessment using the following criteria based on the IAAO standards.
• Median A/S Ratio between .93 to .97
• A/S Ratio COV between 6 and 12 OR COD between 6 and 10 (you may use either criterion)
• A/S Ratio PRD between .98 and 1.02 or PRB below .1 (you may use either criterion).
• 80% of Proposed CVs must have an AS ratio between .87 and 1.03.
• The tracking chart should show no significant change in assessments across the year.
• Spatial Distribution of the A/S ratios (note this is not needed to pass the work, this is to meet the HD requirements)
• Using the data from the Excel Sheet on the Audit tab, use sales from December 10th, 2024, onwards to test the earlier models provided to you. You will need to apply the

This Law has been solved by our PHD Experts at My Uni Paper.