Registered Valuers are recognised in New Zealand as the authority when it comes to assessing the value of property. A Registered Valuer must adhere to high ethical standards (enforced through the Valuers Act 1948) and they follow a comprehensive set of practice standards that are approved by the New Zealand Institute of Valuers (NZIV) - of which a Registered Valuer must be a member of. NZIV is an institute that dates back to 1938 and one that is held in high regard internationally. One of NZIV’s functions under the Valuers Act 1948 is to protect and promote the interests of the profession of valuing and the interests of the public.
The function of the Registered Valuer in New Zealand’s economy
Progressive open market economies are characterised by strong, transparent and trusted property systems. The performance of a country's property system is a key component of economic growth based on its ability to attract investment and generate financial leveraging. The New Zealand system is highly regarded as evidenced by significant global and domestic investment which in turn has helped to drive strong economic performance and sustained population growth. These economic benefits have allowed new investment in community assets such as schools, hospitals, roads etc and encouraged Kiwis to choose to live here rather than abroad. Part of the reason for the success of our property system is the role that professional groups, including Registered Valuers, play to ensure market participants are properly informed. Independent valuation advice, based on international best practice standards, provides a key confidence mechanism for buyers, sellers and lending institutions. In this regard, Registered Valuers play a critical role in the functioning of our property system and the wider economy, meaning that our work matters to the continuing success of New Zealand. The regulation of valuation practices via the Valuers Act 1948 is a very important feature of the valuation process in New Zealand. This sets it apart from other jurisdictions where vested interests can bring pressure to bear, unduly prejudicing the wider public interest.
How to become a Registered Valuer
The Valuers Registration Board (VRB) is a separate entity under the Valuers Act and is administered by the Minister of Land Information New Zealand. The VRB is solely responsible for the registration of valuers. To become a Registered Valuer, generally speaking, you must have an approved tertiary qualification (ie. certain university Bachelor degrees), you must have spent at least three years working full time as a valuer (ie within a firm of Registered Valuers) and you are required to pass an oral and written examination in front of the VRB. Registered Valuers must hold an Annual Practicing Certificate (issued by the VRB) and must undertake ongoing professional development.
How does a valuation undertaken by a Registered Valuer differ from other types of valuation?
Registered Valuers recognise that there are often many factors to consider when assessing a property’s value and that seldom are any two properties are the same. Every property should be treated separately on its own merits. For example, the value of a residential property can be significantly affected by the dwellings layout, its elevation/aspect including views, the quality and standard of its immediate surrounds, and the quality/condition of the improvements. None of these factors can be robustly considered by an unregulated algorithm or a computer programme. Moreover, trends and market dynamics can contrast substantially in different locations and can change significantly over time.
Rating Valuations are undertaken for the purpose of apportioning rates by a local authority. They are undertaken on a mass appraisal basis, and they are not undertaken to the same standard expected of a Registered Valuer. Unlike the best practice standards of a Registered Valuer, the financial and timing constraints on the rating valuation process does not afford it the luxury of being able to send out Registered Valuers to inspect all properties and nor do they have the time to robustly consider all the relevant factors that affect each particular property's value. While they play an important rate apportioning function in New Zealand’s economy, they are not intended to be used by the public for transaction or mortgage security purposes. Futhermore, rating values are fixed at particular points in time (they are only assessed every three years), and therefore do not change as the market changes. Unfortunately, rating valuations are often quoted and referred to for purposes other than apportioning rates because they are readily available.
Algorithms and other mass valuation models also suffer from similar limitations.
Many pieces of legislation, legal documents and lending institutions in New Zealand refer to and rely on Registered Valuers because they are the authority on property value.