Property valuation model for rural Victoria
Creators: name: Hayles, Kelly
Publisher: name: RMIT University
Year: 2024

description: Licensed valuers in the State of Victoria, Australia currently appraise rural land using manual techniques. Manual techniques typically involve site visits to the property, liaison with property owners through interview, and require a valuer experienced in agricultural properties to determine a value. The use of manual techniques typically takes longer to determine a property value than for valuations performed using automated techniques, providing appropriate data are available. Manual methods of valuation can be subjective and lead to bias in valuation estimates, especially where valuers have varying levels of experience within a specific regional area. Automation may lend itself to more accurate valuation estimates by providing greater consistency between valuations. Automated techniques presently in use for valuation include artificial neural networks, expert systems, case based reasoning and multiple regression analysis. The latter technique appears most widely used for valuation. <br><br>The research aimed to develop a conceptual rural property valuation model, and to develop and evaluate quantitative models for rural property valuation based on the variables identified in the conceptual model. The conceptual model was developed by examining peer research, Valuation Best Practice Standards, a standard in use throughout Victoria for rating valuations, and rural property valuation texts. Using data that are only available digitally and publicly, the research assessed this conceptualisation using properties from four LGAs in the Wellington and Wimmera Catchment Management Authority (CMAs) areas in Victoria. Cluster analysis was undertaken to assess if the use of sub-markets, that are determined statistically, can lead to models that are more accurate than sub-markets that have been determined using geographically defined areas. <br><br>The research is divided into two phases; the 'available data phase' and the 'restricted data phase'. The 'available data phase' used publicly available digital data to build quantitative models to estimate the value of rural properties. The 'restricted data phase' used data that became available near the completion of the research. <br><br>The research examined the effect of using statistically derived sub-markets as opposed to geographically derived ones for property valuation. Cluster analysis was used during both phases of model development and showed that one of the clusters developed in the available data phase was superior in its model prediction compared to the models produced using geographically derived regions. <br><br>A number of limitations with the digital property data available for Victoria were found. Although GIS analysis can enable more property characteristics to be derived and measured from existing data, it is reliant on having access to suitable digital data. The research also identified limitations with the metadata elements in use in Victoria (ANZMETA DTD version 1). <br><br>It is hypothesised that to further refine the models and achieve greater levels of price estimation, additional properties would need to be sourced and added to the current property database. It is suggested that additional research needs to address issues associated with sub-market identification. If results of additional modelling indicated significantly different levels of price estimation, then these models could be used with manual techniques to evaluate manually derived valuation estimates.