Lanka Property web land prices analysis misleading: Institute of Valuation
View(s):The Institute of Valuers of Sri Lanka, a legally established body, has rejected claims made in a recent media release issued by Lanka Property web over real estate prices rising.
It was referring to a statement issued by the property website which was published in the Business Times on June 6 headlined “Land Prices in Western Province rise by 74% in 2018 – 2021”.
It said by law the sole authority and the competent person in regard to valuation is the Government Chief Valuer and no other person or body.
In a statement, the institute’s General Secretary G. J. Sumanasena said that land prices in the Western Province have not risen by 74 percent during 2018 – 2021 as claimed by Lanka Property Web.
“This may be based on a purported Index made by them for their own purposes and we urge the general public to be extremely wary and cautious and not to rely on or believe statements made by unidentified and unrecognised sources,” he said.
In this regard, placing considerations on legal documents when transfer of property by the Provincial Councils is also an illegal and an unauthorised ultra virus act and the general public should be aware and be careful, as there are no professionals involved in this exercise; if it has to be done, the Chief Valuer is the sole authority, he added.
Valuation is a highly recognised, well accepted and well established profession, which is a specialised, multi-disciplinary subject of study and to become a professional valuer one has to gain experience under an accepted guidance and obtain the membership of the Institute of Valuers of Sri Lanka.
Lanka Property Web in listing/advertising Website for Real Estate Property related advertisements is not an entity or body capable of providing valuations as they are not in any manner professionals in valuation or any member of the Institute.
“Accordingly, they lack the qualification and more importantly the expertise and experience to make such unqualified claims / unqualified conclusions and to make such irresponsible statements on land values in Sri Lanka,” he said.
“However, one may pose the question of whether by virtue of being listing / advertising Website, they would have sufficient property data for research and analysis whereby they are able to formulate such conclusions on Land Values and build Indexes based on the same. The simple answer to this would be ‘No’,” he added.
The principal or the main determinants of value of a property is the function of two basic factors namely the Demand and Supply accompanied with many other inter alia relevant and sometimes unique ingredients, characteristics etc. The value will differ from one to another and it is based on physical, social and cultural factors in some instances.
Therefore, it is very clear that the data associated for listing / advertising is grossly insufficient to make such publication, since that data is not primarily comparable. Such data is plagued by ambitious over estimation of prospective sellers and generally information asymmetrial in the market and is uncorroborated with other relevant inputs and factors, the statement said.
Claims by Lanka Property Web also try to generalise the land value increase (which increase is non-existent to the extent as claimed) in a broad manner. Real Estate Property values tend to vary on many attributes and factors relating to each specific instance and it is illogical, impractical and is not prudent to have broad generalisations.
“We further inform the public that there are many parties with vested interests that are using devious tools and / or marketing through different forms of media including that of social media and these are circulated by such parties that stand to gain by inflating / overestimating Real Estate prospects,” the statement said, adding: “We see this as an attempt to catch off guard the relatively inexperienced investors and the public who are looking to invest their hard-earned income.”